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Credit Card Debt is a Big Cause of Bankruptcy

Many people believe that filing for credit card debt bankruptcy is the end of repayments and harassment calls. However the truth is that the law has given creditors power to challenge bankruptcy. They can file an adversary proceeding and claim that the debt incurred was fraudulent or the consumer willingly avoided the payments. This is known as ‘non-discharge-ability action’ as well.[br]

Triggers of Non discharge-bility: Credit Card Debt Bankruptcy

Though legally they can file the petition in just two situations that are fraudulent procurement of the card and the card being used without any intent to pay back, there are many situations that make creditors suspicious of the card holders’ intent. Some of them are:

·        Sudden increase in the card’s usage before filing for credit card debt bankruptcy

·        Heavy usage of a new card

·        Large cash advances before filing

·        Card’s use for traveling and vacations in months before filing

·        Exceeding the credit limit

·        Following a pattern of balance transfers

·        Using the card in situations when the person knows that repayment will be tough

·        Large credit balances at the time of filing

·        Shopping done after consulting a bankruptcy lawyer

In fact, cash advances over $1,075 within 60 days of filing are presumed to be fraudulent and thus are considered non dischargeable by the court.

Consumers thus should avoid using credit card once they known that repayment will be tough or impossible. It is the time between the usage and filing for bankruptcy that triggers the creditors to file for a non-discharge-bility. Keeping this in mind, court may issue non-discharge-bility for a few transactions as well rather than the whole balance.

Your Options in Non-Discharge-bility: Credit Card Debt Bankruptcy[br]

If you are wary of being challenged by a creditor, you may exercise the following steps to pursue bankruptcy:

·        Always wait for some time between making charges on your credit card and filing for bankruptcy. This leaves very few reasons for the creditors to challenge your bankruptcy file.

·        Settle the matter off court if any creditor files a non-discharge-bility action. This avoids the delay.

If contesting in court remains the only way out to pursue credit card debt bankruptcy, ensure that you have all the statements backing you as proofs.