By: chris skinner September 27, 2024

How to File Bankruptcy for Credit Card Debt in San Bernardino

Unsecured Credit Card Debt is Dischargeable in Bankruptcy in California

Many people are having a hard time meeting their credit card bills. According to data from the Federal Reserve Bank of New York, Americans hold a collective $1.1 trillion in unpaid credit card debt (September 2024). For reference, that is one of the highest total credit card debt figures in the history of our country. Of course, credit card debt only becomes a real problem when you cannot easily keep up with your payments. Your credit card bills could end up growing each month—and eventually you may be maxed out and unable to make the required monthly payments.

When considering bankruptcy in San Bernardino, it is essential to understand that credit card debt is generally unsecured debt. The classification means it does not have collateral backing it—and it is dischargeable through the bankruptcy process. In other words, most people who file for bankruptcy

can eliminate their credit card debt entirely. Indeed, credit card debt is one of the leading reasons why people file for bankruptcy. A successful bankruptcy petition can be a tool to resolve credit card debt and move towards a more stable financial future.

You Cannot File a Credit Card Debt Specific Bankruptcy

If you file for bankruptcy for credit card debt, you are filing for bankruptcy for all of your assets and liabilities. There is no such thing as a credit card debt specific bankruptcy filing in San Bernardino, California. Put another way, you cannot file for bankruptcy exclusively for credit card debt. Whether you are considering Chapter 7 bankruptcy or Chapter 13 bankruptcy, your filing must encompass all your debts—not just those from credit cards. It is a holistic approach that ensures that all creditors are treated fairly and that the debtor achieves a comprehensive resolution to their challenges. \

A Lawyer Can Help You Evaluate if Bankruptcy is the Right Financial Options

Determining if bankruptcy is the right choice for your financial situation in San Bernardino can be complex. There is no one-size-fits-all solution. Consulting with a high-level personal bankruptcy lawyer is a must. You should take on big credit card companies alone when you are struggling making payments. An attorney can take a proactive approach.

Among other things, your San Bernardino, CA bankruptcy lawyer will conduct a detailed analysis of your financial condition and guide you on whether bankruptcy will offer the relief you need. Their expertise can make the difference. Remember, a bankruptcy lawyer does more than just paperwork. They act as your advocate, helping to protect your rights and assets throughout the process.

Understanding the Difference Between Chapter 7 and Chapter 13

For those in San Bernardino County who are falling behind on credit card debt, there are two main options for personal bankruptcy. You may be able to resolve your issues through a Chapter 7 bankruptcy filing. Or, alternatively, through a Chapter 13 bankruptcy filing. Here are the key points that you need to understand about the difference between the two options:

Eligibility (Chapter 7 Restricted, Chapter 13 Open): Chapter 7 bankruptcy has specific eligibility criteria, including a means test that assesses if your income is low enough to file under this chapter. If your income is above the state median and you can pay back some of your debt, Chapter 7 may not be an option. On the other hand, Chapter 13 does not have an income requirement and is accessible to a broader range of debtors.

Liquidation (Chapter 7 Eliminates Debt, Chapter 13 Repayment Plan): In Chapter 7 bankruptcy, most of your unsecured debts, such as credit card debts and medical bills, can be completely wiped out through a liquidation process. It involves selling off non-exempt assets to pay creditors. Chapter 13 bankruptcy, on the other hand, does not end with an outright liquidation. Instead, it restructures your debts into a manageable repayment plan lasting three to five years.

Credit Report (Both Impact Rating—Chapter 7 for Longer): Both Chapter 7 and Chapter 13 bankruptcies significantly impact your credit score, but the duration and extent differ. A Chapter 7 bankruptcy remains on your credit report for up to ten years, which can make obtaining new credit more challenging during this period. Chapter 13 bankruptcy is slightly less punitive in terms of credit reporting, remaining on your record for seven years. Although both types decrease your credit score initially, starting anew with a Chapter 13 plan can begin to improve your credit sooner.

How San Bernardino Bankruptcy Attorney Le’Roy Roberson Can Help

When credit card bills start to pile up, it can easily feel like you are drowning. No matter how difficult your financial situation seems, it is important to remember that you always have options available. A top-tier San Bernardino personal bankruptcy lawyer, Le’Roy Roberson will review your situation, evaluate your options, and help you determine the best course of action to get out of credit card debt and move towards a more stable, bright financial future. Attorney Roberson offers free, confidential initial consultation to people and families in San Bernardino County.

Consult With Our San Bernardino Bankruptcy Lawyer Today

At Resolve Law Firm, APC, our San Bernardino bankruptcy attorney is standing by, ready to help you navigate the legal claims process. Have questions about bankruptcy and credit card debt? Professional support is available. Contact us now for your free, confidential 30 minute phone consultation. We handle bankruptcy cases in San Bernardino and all across Southern California, including in Fontana, Ontario, Chino, Victorville, Rancho Cucamonga, and Apple Valley.