What is Credit card bankruptcy

What is Credit card bankruptcy

A credit card bankruptcy is generally filed to evade from any form of debt. Unlike other forms of escape, this method does not ask for regular monthly payments. But this form of payment is not easy as it looks like. Whenever you file a bankruptcy, it will be visible on the credit report and will be there for the coming ten years. This way, the credit rating will become better in the due course. But one of the biggest flaw of this process is that the prolong wait will turn out to be very difficult for you and will cause great financial and professional pressure to you.

According to the recent alteration sin the consumer prevention act, certain tests needs to be passed to find out if one is fit to appear for filing a credit card bankruptcy. This test is called as means test. It will help to analyze the average earnings of any person in the last 6 months including the assets and liabilities earned in the process. According to professional experts, an individual who has a frozen account, has multiple law suits, jobless and is suffering under the burden of debts is qualified to file a bankruptcy.

A credit card can only be wiped out possibly if the bankruptcy is properly filed and that too under chapter 7. For this chapter, the means test is very essential. The non-exempt assets such jewelries, multiple valuable collections, a car and a home will be required to be transferred to a faithful trustee. All such assets will be used to pay of the creditors and all the due amounts. When you file chapter 7, it can put u in trouble. It can make you vulnerable to face any charges related to fraud criminal bankruptcy. The creditor has the right to file a proceeding against the person who has file chapter 7.

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