Your statement just came in the mail and you know that your credit card debt continues to cost you more and more money. The average interest on personal credit cards has climbed to 21.59%. We know with the rise in food prices and inflation that credit cards often help you bridge the gaps in your finances. And yet, it feels like the balance is increasing with no way to pay it. So, what can you do?
You’ve thought about bankruptcy, but you wonder if that credit card debt can still be erased in bankruptcy even if you have made recent charges? The answer is it depends on your purchases and when they were made. Let’s walk through a few situations that may apply to you.
I spent $600 in the last few months on my credit card, can that be discharged?
The short answer is, absolutely. If you have spent less than $800 in the 90 days before your bankruptcy is filed, the credit card debt is dischargeable.
I need my credit card to make up for lack of income each month and have spent almost $900 in the last 90 days, will that be a problem?
It’s possible that all of it could be dischargeable, but it will depend on what you have purchased with your credit card. The main question is: are you spending $900 on things you want or things you need? An example of “needs” includes gas, groceries, utility bills, necessary clothing, medical expenses. A “want” is something that is nice, but not something necessary to get you through the day. A “want” would include, cable tv, fast food, coffee shops, expensive clothing, or digital devices. If you spent less than $800 on “want” items, it’s still dischargeable. And any dollar amount of credit card purchases on necessities or “needs” is dischargeable in bankruptcy.
I charged over $800 to my credit card on “wants” in the last 90 days, am I unable to file a bankruptcy?
The simple answer is no. In your situation, it would be best to wait to file your bankruptcy. This does not mean you should wait to start the process of speaking to an attorney. There is every reason to retain a bankruptcy lawyer, prepare to file as soon as you pass the 90-day test, and stop paying your credit card bills! It will take the credit card companies at least 90 days to react to your non-payment and start the collection process.
If the credit card company calls you, tell them you are filing bankruptcy. If you’ve retained us, be sure to tell them to call Steffens Law Office at (308) 872-8327. We take these creditor calls, because we know this is how they verify if you really did hire us. Because our firm is well known in the collection industry, creditors seldom take any action after they call us. If they do decide to file a lawsuit, we will also help you with the process to avoid garnishment and give you the time you need to file your bankruptcy.
To keep things simple while moving forward, when you decide to get your fresh financial start and file bankruptcy, stop using your credit cards. It’s the honest and fair thing to do. Enjoy the peace of mind knowing that your fresh start, without credit card debt, is on its way!
Need more information about your specific situation? Give Steffens Law Office a call today at (308) 872-8327 or fill out our online contact form. Our compassionate and caring staff are ready to answer your questions and get you started on the path to being debt free!