Can I file bankruptcy on only my credit cards?
The reason that people want to file bankruptcy on credit cards only, and not on other bills, is because the credit cards are the only ones causing them problems. They are up-to-date on their car payments. They are current on their house payment. They don’t want to disturb the other creditor relationships that they have, and, in many cases, they are hoping that by filing bankruptcy only on their credit cards, and not on their other bills, they will be able to preserve their credit score in the process.
The bankruptcy code requires that all debts be disclosed. So, you cannot just file bankruptcy on credit cards alone, you have to list all of your debts. However, just because you are listing all your other debts does not necessarily mean that you are not going to pay them. In fact, most of my clients keep their cars and continue to make their car payments. We keep our houses and continue to make our house payment. It is not necessary to lose your house or your car if you file bankruptcy and just want to get rid of your credit card bills.
In fact, just this morning, someone contacted me on my website and explained that he was spending almost $1,000 per month on credit cards. His credit card bills are so great that is now starting to charge food and gas, basic living expenses, on his credit cards.
Instead of paying cash for his necessities, he charges all of his necessities on credit cards and then pays a credit card bill. The problem with this is that the interest is overwhelming him! In addition, he sees that there is no end in sight for this problem that is getting worse and worse each month.
I want to tell him that the answer for his particular family is probably going to be to file a Chapter 7 bankruptcy and wipe out all the credit cards. He will not be paying anything to these particular credit cards, and, because I happen to know how much he earns and what is other bills are, I think the chapter 7 will probably be his best bet.
However, he is going to keep his house and his car and, he now has a credit score of about 700. With my help, he will be able to wipe out all of his credit card bills, keep his car and his house, and, within one year, I predict that he will have a better credit score then he has right now. (more on that in another post – my clients routinely get credit scores of 650 and higher very soon after their bankruptcy discharge).
So – if you are looking to file bankruptcy just on your credit cards and not on your other debts, you can do it – as a practical matter – but you do have to list the other debts as well. This is just one of the many misconceptions and misunderstandings that exist surrounding bankruptcy filings.