One of the most daunting problems facing consumers today is credit card debt. It’s safe to say that many Americans rely on credit cards – especially for big-ticket items. However, due to rapidly rising interest rates, unreasonable fees, penalties, and minimum payments which do very little to bring down the actual principle amount, credit card debt can quickly become overwhelming. This is especially true when unexpected events like medical issues, job loss, and large home repairs occur.
Because a recent United States Supreme Court decision, consumers who sign a credit card agreement that contains an arbitration clause have no right to dispute fees or charges in court. Credit card companies, including companies who provide consumers with automobile and student loans, may charge exorbitant fees with no fear that borrowers will seek legal recourse as borrowers are now bound by the arbitration clause in their agreement.
Credit card companies often include certain fee and repayment structures into their agreements that are designed to keep consumers perpetually paying. The impact of these strategies, especially in today’s difficult economy, can cause stress for individuals and families. At Tudhope Law, we understand the financial stress that increasing credit card debt can place on you and your family and we can help by providing you with alternative debt relief options such as bankruptcy.
Debtors may be hesitant to file for bankruptcy under the mistaken impression that they can no longer discharge credit card debt under the latest changes to the Bankruptcy Code. The truth is that you can still discharge significant credit card debt through bankruptcy.
Under Chapter 7 bankruptcy, a Debtor may discharge the full amount of credit card debt owed. Under Chapter 13, a percentage of such debt must be repaid, the amount of which is determined by the debtor’s income and how much he or she is able to pay. In Chapter 13 bankruptcy, such debts are paid as part of a reasonable consolidated monthly payment plan of three to five years under which the interest rate on the debt is locked in. At the end of the plan, any remaining balance will be discharged. Filing for bankruptcy will immediately stop all creditors from harassing you and will stop additional interest and late fees from accruing.
Debtors may not make charges on their credit cards within the 90 days preceding their bankruptcy filing. In the case of substantial charges, it may be necessary to wait a short period of time before filing in order to comply with the mandates of the Bankruptcy Code. Occasionally a creditor will challenge the inclusion of credit card debt in a bankruptcy, but the creditor must show that credit card abuse occurred. An example would be when a debtor uses false financial information to obtain or increase credit. Another example is maxing out credit cards in the weeks or months before filing for bankruptcy with no intention to pay back the charges.
Tudhope Law in Orlando will carefully review and evaluate your case to determine the best solution for your needs. Our firm also offers alternative solutions such as debt negotiation and debt consolidation. If you have substantial credit card debt and you want a fresh start, contact us today at (407) 969-0044 for a free confidential consultation. Our experienced Orlando Bankruptcy Lawyers will discuss your options and will work with you to devise a plan to get you back on a path to financial freedom.
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