Slide 2:
Previously, filing credit card bankruptcy was the preferred method for eliminating debts. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) took effect to stave off unwarranted bankruptcy petitions from consumers who engaged in reckless spending. Today, it has become considerably more challenging to obtain debt relief.
Slide 3:
Creditor meetings take place within 30 days of filing for bankruptcy protection. Debtors can meet with creditors to explain their situation and work out a payment plan. Chapter 13 payment plans are submitted to the bankruptcy judge for review. Judges can approve, deny, or request changes to the payment plan.
Slide 4:
Bankruptcy payment plans can cause serious financial hardship to debtors. In addition to paying normal expenses, debtors must adhere to Chapter 13 plans or run the risk of failing out of bankruptcy. When debtors do not abide by their plan, creditors can petition the court seeking dismissal of the bankruptcy petition. If this occurs, debtors lose protection from the court and creditors can commence with collection action.
Slide 5:
Debtors who are considering filing credit card bankruptcy should investigate bankruptcy alternatives such as budgeting, credit counseling, debt management, debt consolidation or debt settlement.
It is crucial to engage in due diligence when using debt reduction companies claiming they can settle credit card debt for pennies on the dollar.
Slide 6:
Consumers who require help managing credit card debt or deciding if personal bankruptcy is the best option should visit the National Foundation for Credit Counseling website at NFCC.org. It is important to understand the advantages and disadvantages of credit card bankruptcy. This option should only be used as a last resort. Afterward, debtors should engage in credit repair strategies by paying bills on time and in full each month.