What Happens to Credit Card Debt When Filing for Bankruptcy in Columbus?
Filing for bankruptcy can be an important decision, particularly for individuals struggling with credit card debt in Columbus. Understanding the implications of bankruptcy on credit card debt is essential for anyone considering this path, as it can provide a fresh start while also influencing future credit opportunities. In this article, we will explore what happens to credit card debt when filing for bankruptcy in Columbus and what you should keep in mind during this process.
As of October 2024, a total of 11,403 bankruptcies were filed in Ohio, including 8,970 Chapter 7 bankruptcies and 2,387 Chapter 13 bankruptcies. [1]
Understanding Credit Card Debt
Credit card debt generally refers to the total outstanding balances that borrowers carry from one month to the next. This form of debt can be beneficial for those looking to make purchases while delaying payment. However, credit card debt comes with some of the highest interest rates in the financial sector. Fortunately, borrowers have the opportunity to pay off their balances each month, which can help them avoid accruing interest over time. [2]
High credit card balances relative to your credit limit can lower your credit score, making it difficult to secure loans or favorable interest rates in the future.

Chapter 7 Bankruptcy and Credit Card Debt in Columbus, Ohio
Chapter 7 bankruptcy is a form of bankruptcy that allows you to eliminate most of your unsecured debts or dischargeable debts, including credit card debt. If you’re struggling with overwhelming credit card bills in Columbus, Ohio, filing Chapter 7 bankruptcy can help you regain financial stability.
How Chapter 7 Bankruptcy Affects Credit Card Debt
Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” is designed for individuals who cannot repay their debts. During this process, a bankruptcy trustee is appointed to oversee your case, sell non-exempt assets, and distribute the proceeds to creditors.
However, many personal assets may be exempt under Ohio law, allowing individuals to retain essential property. Chapter 7 bankruptcy influences your credit card debt in the following ways:
- Discharge of Debt: One of the primary benefits of filing for Chapter 7 bankruptcy is the potential to discharge credit card debts. This means that after the bankruptcy process is complete, you are no longer legally obligated to pay these debts.
- Immediate Relief: Upon bankruptcy filing, an automatic stay goes into effect. It halts creditor actions, including collection calls and lawsuits, providing you with immediate bankruptcy relief from creditor harassment.
- Impact on Credit Score: While Chapter 7 bankruptcy can provide a fresh start, it will also negatively impact your credit score. The bankruptcy will remain on your credit report for up to 10 years. However, many individuals find that they can begin to rebuild their credit fairly soon after their debts are discharged.

Chapter 13 Bankruptcy and Credit Card Debt in Columbus, Ohio
Chapter 13 bankruptcy allows individuals with regular income to reorganize and repay their debts over a specified period, usually a three to five-year payment plan. If you’re facing mounting debt in Columbus, Ohio, Chapter 13 could be a viable option for regaining control of your financial situation.
How Chapter 13 Bankruptcy Affects Credit Card Debt
Chapter 13 is one of the types of bankruptcy often referred to as “reorganization bankruptcy.” It provides a way for individuals to consolidate their debts into a single monthly payment. Unlike Chapter 7, which may lead to the discharge of debts, Chapter 13 requires a repayment plan that outlines how debts will be paid off over time.
Chapter 13 bankruptcy affects your credit card debt in the following ways:
- Debt Repayment Plan: Under Chapter 13, you will propose a repayment plan to the court, detailing how you intend to repay your credit card companies. It lasts either three or five years, depending on your income and the amount of debt you have.
- Discharge of Unsecured Debt: At the end of your repayment period, any remaining unsecured debt, such as credit card debt, may be discharged. It means you will no longer owe any remaining balance on those accounts.
- Protection from Creditors: Once you file for Chapter 13, an automatic stay goes into effect, which stops creditors from taking collection actions, including lawsuits and garnishments. It provides immediate relief from the stress of creditor harassment.
- Impact on Credit Score: While Chapter 13 bankruptcy stays on your credit report for seven years, it may have a less negative impact on your score compared to Chapter 7. Successfully completing a repayment plan can demonstrate to future creditors your commitment to repaying debts.

Effects of Bankruptcy on Credit Score in Columbus, Ohio
Bankruptcy can significantly impact your credit score, and the effects are generally similar across the United States, including Columbus, Ohio. Here’s a breakdown of how bankruptcy affects credit scores and what you can expect:
Immediate Effects on Credit Score
- Credit Score Drop: Filing for bankruptcy can lead to a significant drop in your credit score, depending on your credit profile prior to filing. The exact impact varies based on factors such as your current credit score and how long you’ve had credit.
- Public Record: Bankruptcy is recorded as a public record on your credit report. It can remain for up to 10 years (Chapter 7 bankruptcy) or 7 years (Chapter 13 bankruptcy) from the date of filing.
Long-Term Effects
- Credit History Impact: The bankruptcy entry will lower the overall length of your credit history, which can negatively influence your score. A longer credit history typically helps improve your score.
- Credit Mix: Filing bankruptcy usually leads to the closure of credit accounts, which can decrease the diversity of your credit mix, a factor that credit rating models consider.
- Rebuilding Credit: While it may seem daunting, many individuals can start rebuilding their credit scores soon after bankruptcy. Secured credit cards, credit-builder loans, and responsible use of new credit can help.
- Future Credit Availability: After a bankruptcy, obtaining new credit can be challenging. Lenders may offer credit, but often with higher interest rates and less favorable terms.
Is it Possible to Keep Credit Cards When You File bankruptcy in Columbus?
In Columbus, existing credit card debts are typically discharged in a Chapter 7 bankruptcy, meaning the borrower is no longer responsible for repaying those debts.
However, if you wish to keep a credit card during bankruptcy, it’s essential to understand your options. You may choose to retain a credit card with a zero balance. This way, you can maintain the account without incurring additional debts. Alternatively, you can request the credit card company to reaffirm the debt. Reaffirmation involves agreeing to continue repaying the debt, which allows you to keep the credit card, but it also means you remain liable for that debt post-bankruptcy.

Contact the Richard West Law Firm to schedule a free consultation with Richard West, a board-certified Ohio bankruptcy lawyer, regarding your Columbus bankruptcy options and credit card debt.
Sources:
[1] Court Statistics | Northern District of Ohio | United States Bankruptcy Court. (n.d.). https://www.ohnb.uscourts.gov/court-info/court-stats
[2] Kagan, J. (2021, December 1). Credit Card Debt: What It Is, How It Works. Investopedia. https://www.investopedia.com/terms/c/credit-card-debt.asp