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Credit Card Debt

Credit Card Debt

Bankruptcy Attorney in Kansas City, MO

Bankruptcy is a legal process that can assist businesses and individuals in repaying or settling debts. The word itself may evoke negative connotations, and with good reason. The decision to file for bankruptcy can provide financial relief, but it will also follow you or your company for many years.

Despite the fact that this process should not be taken lightly, there are instances in which it may make sense and help a household or business regain long-term financial stability. However, it is a complex endeavor, so here is the information you need to get started.

In the United States, bankruptcy is a federal court-administered legal process by which an individual or business can have their debts discharged or restructured. Through this process, lenders may also be able to recover some form of compensation for missed loan payments.

At Jeppson Law in Kansas City, Missouri, we are bankruptcy attorneys who assist clients in escaping difficult financial burdens such as credit card debt. We have many years of experience assisting individuals in difficult financial circumstances, and we will be able to assist you as well. Contact one of our bankruptcy attorneys as soon as possible for more information.

Why do I need a Bankruptcy Attorney in Kansas City, MO.?

You have reservations about handling the bankruptcy case on your own. Self-representation in court can be intimidating; therefore, a bankruptcy attorney can handle legal issues on your behalf.

The paperwork causes you anxiety. Court proceedings typically involve a substantial amount of paperwork. For instance, if you improperly complete paperwork or submit it after the deadline, your bankruptcy case may be jeopardized. A bankruptcy attorney can keep you on track with your paperwork, including any required documents (such as credit card bills).

You are sick of debt collectors calling you on the phone. If debt collectors are persistently harassing you, a bankruptcy attorney can intervene. When you inform a debt collector that you have legal representation, the collector should contact the attorney instead of you.

Bankruptcy, like other legal complications, is a process, and if you want to be successful, you need the assistance of an expert.  For various reasons, a lawyer may be required in a self-bankruptcy application. Hiring a Kansas City credit card debt lawyer provides the following ease:

  • A session to help you gain a better understanding of your situation.
  • Advice on various options, such as the type of bankruptcy to file.
  • Completed the necessary bankruptcy filing paperwork.
  • When a case reaches court, legal representation is provided.

What is Credit Card Debt in Bankruptcy?

credit card debt lawyers kansas city

The path to bankruptcy via credit card debt is relatively straightforward. It begins with missing one monthly credit card payment, followed by receiving a late fee the following month. The next step is to miss two consecutive monthly payments. If you do so, the Credit Card Act of 2009 permits card companies to increase your card’s interest rate.

They can also increase interest rates if:

  • Your credit score decreases
  • You have owned the card for over a year.
  • The prime rate of interest increases.
  • The introductory promotional period ends

The amount by which the interest rate increases varies, but it is not uncommon for the rate to increase from the national average of 17.8 percent to 30 percent if payments are missed. In fact, no law prohibits card companies from increasing their fees further.

When the interest rate increases, along with late payment penalties and over-the-limit fees, your credit card debt skyrockets. If you stop making even minimum payments, debt collection agencies will contact you.

Credit card debt is notoriously aggressively pursued by debt collectors. Their attorneys can file a lawsuit against you and obtain judgments that include wage garnishment and property liens.

Bankruptcy can put an end to lawsuits and collection agencies. It’s called an automatic stay, and it prevents creditors from initiating or continuing collection efforts. It is one of the clear advantages of declaring bankruptcy.

Credit Card Bankruptcy Under Chapter 7

Chapter 7 bankruptcy, if filed correctly, can eliminate not only credit card debt but also other forms of unsecured debt. Among the bills that may be eliminated are:

  • Medicals
  • Utility
  • Personal loans
  • Due rent
  • Phone
  • Insufficient funds due to repossession

There are certain debts that cannot be discharged under Chapter 7, including child support, alimony, taxes, student loans, legal judgments, and fraudulently acquired debt.

Remember that any non-exempt property you own, such as a second home or car, jewelry, art, and other non-essential “luxury items,” will be sold by the bankruptcy trustee and the proceeds distributed to your creditors, including credit card companies.

Credit Card Bankruptcy Under Chapter 13

Unsecured debt, such as credit cards, has a very low priority in Chapter 13 bankruptcy reorganization.

When you file for Chapter 13 bankruptcy, you present the bankruptcy trustee with a repayment plan stating that you will repay the majority, if not all, of your debts within three to five years. The following step is to prioritize the debts, beginning with secured debts (home, vehicle) and priority debts (child support, alimony or back taxes).

Unsecured debt, such as credit card debt, ranks last on the list of priorities.

The Chapter 13 petitioner then evaluates his current and future income to determine how much of it will be used to repay debts over a period of three to five years. Possibly nothing is set aside for credit card debt.

If the bankruptcy trustee approves the plan and the consumer makes the required payments, all debts, including credit card debt, are discharged upon completion of the final payment.

Because Chapter 13 bankruptcy places little emphasis on the repayment of unsecured debt, it is likely that most or all of what you owe on credit cards will be eliminated upon discharge.

Call our Kansas City Credit Card Debt Lawyers Now!

Local bankruptcy rules and procedures can be a burden when you are already experiencing financial difficulties. As bankruptcy attorneys in Kansas City, we are committed to providing highly individualized services to every client because we recognize that every case is unique.

If you are struggling financially and need assistance filing for chapter 7 or chapter 13 bankruptcy, Jeppson Law Office is here to assist you. Schedule a consultation to learn how we can assist you in resolving your financial issues!

GET RID OF UNWANTED DEBT! Contact Us Now! 

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