Chapter 7 Success Lawyers Chicago - Chapter 7 Bankruptcy & Credit Card Debt

Chapter 7 Bankruptcy & Credit Card Debt

One of the most amazing things about Chapter 7 bankruptcy is its ability to change a person's life. A person can go from being swamped in credit card debt in excess of $100,000, to being debt-free within days. Of course, not every Chapter 7 bankruptcy case is simple. Many Chapter 7 bankruptcy cases fall into problems. One typical problem, is when a Chapter 7 debtor incurs credit card charges to close to the filing of the bankruptcy. In those cases, the creditor can file an adversarial complaint, objecting to the discharge of that particular debt or the entire debt.
A good Chapter 7 bankruptcy attorney will advise the debtor to stop using the cards and stop incurring any charges or cash advances. However, there are some Chapter 7 debtors who will not heed the warning of their counsel, and continued to use the cards for charges and cash advances, thinking that the debts are going to be eliminated anyway, so I might as well use them. For most debtors, this practice is something that they can do on a regular basis. For other debtors, they are looking at an adversarial complaint looking to hold the debts due and owing based on fraud.
My advice to Chapter 7 bankruptcy debtors, is this: once you know, you are going to be filing bankruptcy, do not use the credit cards for any purpose whatsoever, do not take out any cash advances, and do not make any minimum payments back on the cards. What seems like sound and simple advice is often overlooked by a Chapter 7 debtor in contemplation of filing a Chapter 7 bankruptcy.

Some creditors are more aggressive than others when pursuing an adversarial complaint against a Chapter 7 debtor. Some creditors have a threshold amount that they are willing to let slide. For others, any amount at all can be enough to bring an adversarial complaint. In my practice, I typically do not see an adversarial complaint for any charges that are under $1500, close to the filing of a Chapter 7 bankruptcy. However, there is no general rule in that any particular creditor can decide to file an adversarial complaint for charges incurred prior to filing that are much less than $500 each. The best advice, is do not use the cards and you will not be facing the possibility of an adversarial complaint objecting to the discharge of the debt in a Chapter 7 bankruptcy case.

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