You may have witnessed just how many people rely on credit cards these days for their daily expenses. And when you look at yourself, you may even realize that you are in the same boat as these people. The problem comes about when it is time to pay off these credit card debts. Timely consultation with bankruptcy Brampton experts could help. Of course Chapter 7 bankruptcy usually seems to be the only way out of a situation like this.

Here are some few tippers on what you need to know before you file for bankruptcy.

1. Secured unsecured debt

There are two types of debt that you need to be aware of before you file for bankruptcy. There is the secured debt and the unsecured debt.

The secured debts are usually associated with assets that you have to declare and put as security for the debt. Unsecured debts, however, are usually not connected to any specific asset. An example of unsecured debt is the credit card debt. Secured debts are usually given a higher priority compared to unsecured ones.

2. Absolute liquidation of debt

Chapter 7 case for filing for bankruptcy usually involves the total liquidation of all debts. In most instances, you will find that no property or any other type of assets exist in this chapter of filing for bankruptcy. At least no assets will be able to pay back the creditors in full.

3. Exemptions to discard credit card debts

As much as filing for bankruptcy will always discharge any credit card debts, you need to know that this is not always the best solution to go for. Some debtors usually have no problem incurring any charges from credit card purchases as these charges always get discharged before filing for bankruptcy. The debtor always stays with the debt if in any case any charge was incurred through pretense or even fraud.

4. Fraudulent purchases

There are two types of purchases that can be considered to be fraudulent if they are made right before you file for chapter 7 bankruptcy. These include;

High-value goods: if you make a single purchase using your credit card to make a single purchase of more than $675 at least three months before you file for bankruptcy, then the debt can be dis-chargeable. Gas, food, and clothing do not fall under the category of luxury goods. Cash advances: if you use over $950 of cash from your credit card within 70 days before you file for bankruptcy, then this debt will be presumed to be fraudulent and thus not dis-chargeable. Fraudulent charges exceptions

As a debtor, you need to know that there are some exceptions exist that can help you out of any fraudulent.

5. Creditors may challenge dischargeability

Creditors have the right to file a complaint with a bankruptcy court if they plan to dispute any charges. This is possible if you, the creditor, believe that your debtor made a charge with you, but you believe that the debt shouldn’t be dis-chargeable. A time frame of 60 days is usually given to file this case after the first meeting with the creditors.

6. Don’t break the bank while starting your case

Of course, there will be legal questions that you will have no clue as to how you will go about; and for this reason, you may consider hiring an attorney to walk you through all these processes. You will only be compounding your legal issues with more legal fees for the attorney. You can always call for information that can significantly reduce all the legal charges.


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