Bankruptcy for Credit Card Debt: 3 Do’s and 3 Don’ts

Written by admin on . Posted in Blog

bankruptcy for credit card debt

While separating do’s from don’ts is important at all times, it’s absolutely vital when it comes to dealing with unsustainable credit card debt — because the wrong information or advice can, and usually does, lead to an enormous amount of pain and suffering on all levels: financially, emotionally, and even physically. Indeed, according to, excessive credit card debt can trigger chronic stress that weakens the immune system, causes headaches and migraines, and sends blood pressure levels through the roof.

If you or someone that you care about is currently staring at an ever-growing mountain of credit card debt, then here are 3 do’s and 3 don’ts that you need to know about bankruptcy for credit card debt:

  • DO know that filing for bankruptcy will discharge your credit card debt in most cases. The exception is if it is proven that your debt was incurred through fraud, false misrepresentation, or false pretenses. In such cases, the balance will not be discharged and will stay with you.

  • DO be aware that a discharge from bankruptcy only applies to you. It will not apply to guarantors or co-signers, who will still remain liable for the debt. It is very important to keep this in mind to ensure that you do not face unexpected financial and/or personal challenges ahead.

  • DO respond promptly and carefully if a credit card company wants to classify that a debt is chargeable instead of non-dischargeable. Failing to respond in a timely manner will result in the court making you responsible for the debt.

  • DON’T be intimidated or misled by credit card companies. When they try and scare — make that terrify — you about the financial self-destruct button you will hit after declaring bankruptcy, be aware that they are bluffing. The fact is that credit card debt is considered a “non-priority claim,” which means that credit card companies are at the bottom of the list of creditors, and often don’t get a cent. So yes, the last thing they want you to do is declare bankruptcy. But this is not because it’s not in YOUR best interest, but rather because it’s not in THEIR best interest.

  • DON’T under any circumstances “rack up” credit card debt in advance of filing for bankruptcy (e.g. taking out a cash advance, buying luxury goods, going on vacation, etc.). Not only will these debts remain, but you will likely face a criminal fraud allegation. With this being said, it is typically fine to charge normal household items and cover basic living expenses prior to a bankruptcy filing (e.g. gas, groceries, etc.).

  • DON’T believe that debt settlement will necessarily lead to a “softer” credit score hit vs. filing for bankruptcy. This is a myth that many debt settlement companies perpetuate. The fact is that once a settlement is reported, it will indeed affect your credit score similar to a bankruptcy filing.

  • Learn More

    To learn more, contact the Law Office of Charles H. Huber. We will give you the facts you need to make a smart, safe decision on whether bankruptcy for credit card debt is in your best long-term interest. Our experience is your advantage!

The Pros and Cons of Declaring Chapter 11 Bankruptcy

Written by admin on . Posted in Blog

chapter 11 bankruptcy

Typically filed by corporations and partnerships (though in some rare cases by individuals), chapter 11 bankruptcy allows businesses with an unsustainable debt burden to propose a plan in which their debt is reorganized and restructured, so that they can eventually return to profitability. If the plan is accepted by the bankruptcy court as compliant and viable, it is executed and monitored accordingly.

As with all other types of bankruptcy filings, there are pros and cons of declaring chapter 11 bankruptcy. We focus on each category below:

Advantages of Chapter 11 Bankruptcy

  • Filing for chapter 11 bankruptcy immediately establishes an automatic stay. Creditors must cease all collection activity, including proposed and commenced lawsuits.
  • The debt reorganization plan usually includes reduced amounts owed and/or reduced interest rates, which ultimately means that debtors pay less.
  • Although they are obviously unhappy with receiving less than the full amount owed to them, creditors are generally receptive to the debt reorganization plan — especially since they are likely to get more than under a chapter 7 bankruptcy filing (a.k.a. liquidation bankruptcy).
  • As noted above, during the execution of the debt reorganization plan a business remains operational, and can honestly and in good faith communicate to concerned customers, suppliers, vendors, and other stakeholders that they plan on re-emerging from bankruptcy vs. are preparing to wind down the business.

Disadvantages of Chapter 11 Bankruptcy

  • Relative to chapter 7, the chapter 11 bankruptcy process is longer, more complex, and costlier due to additional filing, plus administrative and legal fees.
  • The court will reject a proposed debt reorganization plan if it determines that it is not viable, compliant, realistic, and if there is no reasonable expectation that a business can return to post-bankruptcy profitability.
  • The court may impose restrictions on the compensation of a debtor’s “insiders” (e.g. officers, directors, major shareholders, etc.).
  • If the debt reorganization plan is accepted, during execution a debtor will need to seek the court’s approval to perform activities that are deemed outside the ordinary court of business. (With this being said, if the requested activities are justifiable in light of the goals and objectives of the plan, then they are likely to be approved.)

Learn More

To learn more about the pros and cons of chapter 11 bankruptcy, and for a confidential consultation on whether filing is in your business’s best long-term financial interest, contact the Law Office of Charles H. Huber today. Our experience is your advantage!

What Happens After You Declare Chapter 7 Bankruptcy?

Written by admin on . Posted in Blog

chapter 7 bankruptcy

One of the most daunting, stressful, and for some people, terrifying aspects of filing for chapter 7 bankruptcy is not based on what they know about the process. On the contrary, it is rooted in what they do not know — because for most people it is a new experience, and unfortunately, the world (both the online and offline versions) is full of chapter 7 bankruptcy myths.

If you are considering filing for chapter 7 bankruptcy, then your bankruptcy attorney will provide you with a clear understanding of what the road ahead will look like. Generally speaking, here is what you can expect:

  • Your bankruptcy attorney will file your case electronically, and remit all required filing fees on your behalf. You do not have to go court.

  • The court will send a letter to all the creditors listed in your filing, informing them that they must cease all collection-related activity and communication. You and your bankruptcy attorney will also receive a copy of this letter. If creditors have questions or objections, they will not be allowed to contact you directly. They must only contact the court-appointed trustee, who may in turn communicate with your bankruptcy attorney.

  • You will continue paying debts on assets that you wish to keep, such as your car loan and mortgage, along with ongoing living expenses such as utilities. It is very important that you do not stop paying these specific debts, or assume that your creditors will grant you a temporary moratorium or an extended grace period due to the filing.

  • The above-noted letter will also include the date and time for a meeting of creditors. This date is usually set for a month or so after the filing. About a week before the meeting, your bankruptcy attorney will send the trustee a copy of your most recently-filed tax return.

  • The meeting of creditors — which is also called a debtor’s exam or 341 hearing — is an opportunity for any authorized creditor, along with the trustee, to ask you questions under oath. Although the meeting is likely to take place in a courthouse, there is no judge present, and it typically does not last longer than 15 minutes. It is also typically not a confrontational or adversarial exchange, but instead an opportunity to seek administrative clarity. With this being said, be assured that your bankruptcy attorney will attend the meeting with you to ensure that your rights are fully protected, and that you are treated with respect at all times.

  • If you are unable to attend the scheduled meeting of creditors, then you may request (through your bankruptcy attorney) a reset date. It is extremely important that you do not miss both the original and reset date. If your absence is not due to dire unforeseen circumstances (e.g. serious car accident), then your filing may be dismissed. You must also bring picture ID and proof of a Social Security Number in order to be granted entry to the meeting.

  • After the meeting of creditors, the trustee may request additional documents. This request will be made through your bankruptcy attorney. You do not have to worry about receiving complex or confusing legal documents.

  • Within 45 days of the originally scheduled (not the reset) meeting of creditors, you will need to submit a certificate of completion for a court required financial management course. Your bankruptcy attorney will submit this on your behalf before the deadline.

  • During the bankruptcy proceeding, you may wish to petition the court to make adjustments to your filing. For example, you may want to avoid a lien. Your bankruptcy attorney will handle all such filings, and seek to convince the trustee to accept your request.

  • The timing of a chapter 7 bankruptcy discharge varies from case to case. Typically, it occurs about four months after the date that your bankruptcy attorney filed the petition with the court clerk. Along with you and your bankruptcy attorney, the trustee and all creditors will receive a copy of the discharge order. This order also warns creditors that they must not attempt any further collection of discharged debts, and that doing so could subject them to punishment for contempt.

Learn More

To learn more, contact the Law Office of Charles H. Huber. We will give you the facts you need to make a smart, safe decision on whether filing for bankruptcy chapter 7 is in your best long-term interest. We will also be your knowledgeable and fearless “sword and shield” every step of the way, from initial filing through to successful discharge. We have over 30 years of experience filing consumer bankruptcy cases. Our experience is your advantage!

The Pros and Cons of Declaring Chapter 13 Bankruptcy

Written by admin on . Posted in Blog

chapter 13 bankruptcy

Before we discuss the merits and drawbacks of declaring Chapter 13 bankruptcy, we should first take an in-depth look at it. Chapter 13 bankruptcy (which is sometimes called a “wage-earners plan”) allows individuals who earn a regular income to repay their debts, in whole or in part, to creditors over a period of three-to-five years. During this period, creditors are legally forbidden from commencing or continuing collection activities such as wage garnishments, lawsuits, foreclosure proceedings, and so on.

Any individual — including those who are self-employed or who operate an unincorporated business — may file for chapter 13 bankruptcy, provided that their unsecured debts are less than $394,725, and their secured debts are less than $1,184,200 (these figures are periodically revised based on inflation).

Chapter 13 Bankruptcy: Pros

Chapter 13 bankruptcy protection offers significant advantages, including:

  • Provided the person filing makes all payments per the court-approved repayment plan, individuals can stop foreclosure proceedings on their home, and may also remedy overdue mortgage payments over time.
  • Individuals can seek to reschedule their secured debts (except for the mortgage on their primary residence) over the life of their repayment plan, which typically lowers the amount of each payment and makes them more affordable.
  • Third-parties (e.g. co-signers) may be protected on some consumer debts.
  • Individuals do not have to engage in direct contact with creditors at any time. All communication and payments are managed by the court-appointed trustee.

Chapter 13 Bankruptcy: Cons

Naturally, there are some disadvantages of filing for chapter 13 bankruptcy as well. These include:

  • The repayment plan must be supported by disposable income. This means that while the next few years will be lean rather than luxurious.
  • A chapter 13 filing will remain on an individual’s credit score for 10 years (however, contrary to popular belief, this is not a financial catastrophe — click here to learn more).
  • Not all debts can be restructured, such as alimony, child support and student loans (this limitation also applies to a chapter 7 filing).
  • Some debts may survive the filing after the case is closed (e.g. mortgage liens).
  • A chapter 13 filing is more complex than a chapter 7 filing, and as such legal fees are relatively higher.

Learn More

To learn more about the pros and cons of chapter 13 bankruptcy, and for a confidential consultation on whether filing is in your best long-term financial interest, contact the Law Office of Charles H. Huber today. We have been filing consumer bankruptcy cases for more than 30 years. Our experience is your advantage!

When is the Right Time to Declare Bankruptcy?

Written by admin on . Posted in Blog


Filing for bankruptcy is a major decision, and one that should not be done without careful analysis of your specific situation and possible options. Indeed, what may be beneficial for someone else may not optimal for you.

With this being said, there are some general signs that filing for bankruptcy is likely in your best long-term financial interest. Here are some indications that it is now — or very soon will be — the right time for you to declare bankruptcy:

You are Being Harassed or Sued by Debt Collectors

Filing for bankruptcy will place an automatic stay on all debt collection activity, including any wage garnishment action or lawsuits. What’s more, creditors will be unable to contact you directly by phone, email or letter. They will be legally obligated to communicate only with the court-appointed bankruptcy trustee.

You are Facing a Foreclosure

If you have debts that are secured by your home (e.g. mortgage, car loan, home equity line of credit, etc.), then creditors can seek to foreclose in the event of a default. As we have discussed previously, filing for bankruptcy will either stop or delay the foreclosure process.

You Cannot Repay your Debts

Everyone wants to repay their debts. However, if you find yourself unable to cover what you owe — despite your best efforts to reduce expenses, increase income, and negotiate with creditors — then filing for bankruptcy is likely something you’ll need to do in the very near future. Otherwise, the financial hole that you’re in will only get larger, deeper, and more difficult to climb out of in the future.

You Cannot Cover Your Basic Living Expenses

Regardless of what has happened in the past, if you simply cannot meet your basic living expenses now — e.g. keeping a roof over your head, buying groceries, paying for car insurance and gas so that you can drive to work, and so on — then filing for bankruptcy now instead of later is likely the right decision.

The Bottom Line

The idea of “going bankrupt” has a shameful and embarrassing stigma attached to it, which is why many people avoid filing — even when it is clearly in their best financial interest to do so. If you feel this way, then what you need to know is that bankruptcy is NOT a moral judgement that declares you “guilty of mismanaging your money.” Bankruptcy is a legal protection that is fundamentally designed to help individuals (and businesses) reset their financial picture, and create a stable, strong and sustainable financial future.

Learn More

If you are facing unsustainable and constantly growing debt, then contact the Law Office of Charles H. Huber today. We will give you the facts you need to make a smart, safe decision on whether filing for bankruptcy is in your best long-term interest. Our experience is your advantage!