How Discharging Credit Card Debt in Bankruptcy Can Affect a Family’s Finances for the Better

 Posted on March 23, 2023 in Bankruptcy

At the end of a successful bankruptcy case, a filer’s qualifying unsecured debt load is discharged by the court. After a specific debt balance has been discharged, the filer is no longer responsible for its repayment and creditors can no longer ask that it be repaid. Although not all unsecured debts are dischargeable in bankruptcy, two of the most common sources of financial anxiety for American families – credit card debt and outstanding medical bills – are dischargeable upon the conclusion of a successful bankruptcy case.

There are two primary reasons why eliminating credit card and medical debt via bankruptcy is often so beneficial for families. First, alleviating the pressure of paying these accounts every month can dramatically impact the stress level within a household for the better. Second, freeing up the funds that would ordinarily be used to pay these accounts means that they can be directed elsewhere.

The Benefits of Having More Liquid Income

According to a recent Bankrate survey, more than one out of every three Americans has more credit card debt than savings to be utilized only in the event of an emergency. What is particularly striking about that statistic is that it reflects more than an 11% increase from the number of Americans who were struggling with these circumstances only one year ago.

By alleviating the pressure to pay down credit card balances, filing for bankruptcy can allow families to more easily cover their basic expenses and begin saving in earnest for an emergency. Once their emergency “nest egg” has been sufficiently funded, they can start saving for major purchases or repairs, fund their children’s college education, save for retirement, or even – finally – take a well-deserved and hard-earned vacation. In this way, the most significant benefit of filing for bankruptcy is arguably the creation of opportunity and possibility.

Connect with an Experienced Arlington Bankruptcy Lawyer for Free to Learn More

If your credit card balances are proving impossible to pay down regularly and your family’s finances are suffering as a result of these debts, consider scheduling a free case evaluation by contacting the knowledgeable Fort Worth, TX bankruptcy lawyers at Acker Warren P.C.. By calling us at 817-752-9033 or reaching out via the contact page on our website, you can learn more about the bankruptcy process and how our firm would go about representing your interests should you choose to file for Chapter 7 or Chapter 13 debt relief.

Filing for bankruptcy is not always the best solution for a family’s financial challenges. However, overwhelming credit card and/or medical debt can be effectively addressed via the bankruptcy process. As a result, if you are struggling with these kinds of unsecured debts, bankruptcy could be a great way to achieve a fresh financial start. Call today to learn more. We look forward to speaking with you.

Source:

https://www.cbsnews.com/news/bankrate-emergency-savings-survey-americans-report/