Get Help From A Bankruptcy Attorney About Credit Card Debt Elimination

March 5th, 2010 by admin

In bankruptcy, there are two types of debts, secured and then unsecured. In a nutshell , secured debts have collateral and unsecured debts don’t.  Mortgages and car loans or two very common types of secured debts.  Creditors take extra steps to reduce the risk of the loan by taking collateral for the loan, a lien on a house, car or other property. For these loans, there are two components:  1-a promise to pay the debt and 2-a right to sell the property if the promise is not kept. This right to the property survives bankruptcy discharge. If someone is in default of the loan, the right to sell the property is triggered. Bankruptcy law varies so it is very important that you seek the advice of a bankruptcy attorney to know if the filing for bankruptcy will be a default in your state. If someone does not keep the loan current, the creditor’s only remedy may be to foreclose or repossess the property. In fact that may be the only way that a creditor can get title to the property so that they can sell it.

 

Debts owed on most credit cards, like Visa or MasterCard, are almost always unsecured. That means that they will simply be discharged in a Chapter 7 bankruptcy. It doesn’t matter if you use the card for household goods, business expenses, or even travel. Of course, if you use a credit card on the eve of filing for bankruptcy or at a time when you know you were going to have to file bankruptcy, you might find that such use is considered fraudulent and therefore not dischargeable. Typical use of secured cards are those from electronic stores like Best Buy. Electronic companies tend to securitize your use of the card with high-cost purchases, such as a computer. That can mean that when you file Chapter 7 bankruptcy, where you have credit card debt elimination, you might have to give back the computer or keep making the payments. Often, however, the store can’t produce the necessary documentation to prove the security and you will get to keep the computer anyway and discharge the debt.

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