If you have decided that filing bankruptcy for credit card debt is your best option, there are certain things you need to avoid before starting this process. Credit card debt in bankruptcy can be a bit tricky, and there are things you will need to keep in mind when you begin the bankruptcy process in Watertown, NY.
At Grady BK, PLLC, our goal is to provide our Watertown, New York clients with the compassionate and expert legal guidance they need as they navigate bankruptcy for credit card debt. We understand that this process can feel very overwhelming, especially if you already have financial stress, which is why we will support you every step of the bankruptcy process. In this article, we will be discussing declaring bankruptcy for credit card debt and what to avoid when you file for Chapter 7 or Chapter 13 bankruptcy.
Understanding Credit Card Debt in Bankruptcy
One of the most common forms of debt in the United States is credit card debt and is a type of debt that can quickly get out of control. For those considering bankruptcy, credit card debt is often a part of that process, especially if you have experienced financial hardship. During times of economic stress, credit cards often become a lifeline, which can lead to even more financial issues later on.
The good news is that bankruptcy can help you address credit card debt depending on your specific situation and the type of bankruptcy you choose.
- Chapter 7: The most common type of bankruptcy is Chapter 7, as it applies to more situations. Chapter 7 for credit card debt allows you to quickly discharge (wipe away) the majority of your debts so that you do not have to pay them off and, in most situations, credit card debt is dischargeable, allowing you to get relief quickly.
- Chapter 13: On the other hand, the next bankruptcy option in Watertown, NY, is Chapter 13 bankruptcy. This option typically applies to household‘s that do not meet the income requirements for Chapter 7 as the household may have a larger income or more significant assets. Chapter 13 for credit card debt is structured around creating a repayment plan over the course of 3 to 5 years, rather than discharging debts as a whole (you pay back a percent of the debt over the life of the bankruptcy).
Both bankruptcy options will provide strategies for tackling credit card debt as well as provide relief from any harassment from creditors. However, before you decide on a type of bankruptcy, you need to hire a bankruptcy attorney to help you understand which option is the best fit for your financial goals.
What Not to Do Before Filing For Bankruptcy in Watertown, NY
Now that you know about your bankruptcy options for credit card debt in Watertown, NY, you also need to know what you should avoid doing before filing for bankruptcy. Although the process of filing for bankruptcy in New York is relatively straightforward, there are certain things you should avoid doing beforehand that could potentially jeopardize the bankruptcy process. Every aspect of your finances will be closely examined once you file, so you need to be very cautious about how you manage your debts and money beforehand.
Overpay Creditors
Before deciding to file for bankruptcy most people have been trying to pay down their credit card bills. However, avoid overpaying creditors or paying off specific debts even if you have the finances to do so. These types of transactions may be classified as preferential transfers by the bankruptcy court, which could result in the payment being taken back.
Take Out New Debt
You should never start to take out new debts, such as new credit cards, before filing for bankruptcy, especially if you are doing so with the intention of having it discharged later on. This is one of the many things the bankruptcy court will look at, and the new creditor could accuse you of taking out the debt without having any intention of paying it back. Any new debt that was taken out close to the time that you filed for bankruptcy could be labeled as non-dischargeable, which would make you legally responsible for paying it back in full, bankruptcy or not.
Max Out Credit Cards
To avoid credit card debt fraud charges when you file for bankruptcy, you need to avoid making any unnecessary expenses on credit cards you already have. Just because your credit cards may not be maxed out does not mean this is a good time to use them, as this will not look good when you file for bankruptcy. Try to limit your expenses to the bare necessities to prevent additional credit card debt as you are going through this process.
Make Unusual Transactions
Any type of unusual transaction before you file for bankruptcy is going to be closely examined by the bankruptcy court. Because of this, you need to avoid purchasing any luxury goods or giving high-value gifts to loved ones as these types of transactions could easily be interpreted as an attempt to conceal assets or commit fraud.
Watertown’s Top Compassionate Bankruptcy Attorney
Before you declare bankruptcy on credit card debt in Watertown, New York, there are certain things you need to avoid doing that could potentially jeopardize the bankruptcy process. At Grady BK, PLLC, we are here to help you every step of the way to ensure you do not experience any bankruptcy issues, such as potential fraud charges. Having a Watertown bankruptcy attorney to help you navigate this process will ensure the best possible results and help to reduce some of the stress around this process.
At Grady BK, PLLC, we have extensive experience handling bankruptcy cases across New York and strive to provide a personalized approach for every bankruptcy case. You can have peace of mind knowing that you will be our top priority and all of your concerns will be heard.
Contact us today at 315-299-9005 to discuss your financial situation with a bankruptcy attorney. Our team at Grady BK, PLLC, is here to provide you with the legal assistance you need as you prepare to file for credit card debt bankruptcy.
