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Credit Card Debt Bankruptcy
Credit card debt bankruptcy is the last resort for the consumer under debt crisis. Recent figures show that 800,000 Americans file for Chapter 7 bankruptcy, otherwise known as consumer's bankruptcy. The major question remains: if I file credit card debt bankruptcy, will my credit ever be in good shape again? Let's first examine the definition and costs of filing for bankruptcy.
Chapter 7 credit card debt bankruptcy is when debtors convert assets to cash to pay for their outstanding debts. Proceedings are always initiated in a court of law. In return, credit card debt bankruptcy filers are completely relieved of their debts. In most cases, debtors under credit card debt bankruptcy will not have any assets to give. In this case, Chapter 7 bankruptcy can continue without liquidation. Filing a Chapter 7 bankruptcy usually costs in the $200 range. Addition fees are piled on top of that for lawyers, who offer free initial consultations at times.
Re-establishing a positive line is credit is possible after credit card debt bankruptcy. Although it took two to three years before, now bankruptcy filers can have it last for 1 year. After two years, those who went through credit card debt bankruptcy should look to apply for secured credit cards first. Often, they come with no annual fees.
Another tip is to be realistic with your credit limit. Credit card debt bankruptcy filers will not enjoy $5,000 credit limits for a long time. The first approach is to start making your monthly payments on time, every time. Your credit report is being established and its important to keep up with payments. Oftentimes, major credit card companies will deny you credit. Don't fret - retailers and credit union credit lines are often more flexible. Look for those offered at department stores and gas stations in particular.
Those who went through credit card debt bankruptcy should also check up on their credit reports. Report to a free credit report site (available once a year) and pay a small fee, or visit your bank. Check for errors and keep track of all debts. Time will reveal how far you've come after credit card debt bankruptcy.