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Can an Arizona Bankruptcy Clear My Credit Card Debt?

According to Money.com, more than any other type of debt, including medical debts, loans, or mortgages, 11% of Americans said they were “very stressed” about credit card debt as of September 2020.

Our bankruptcy attorney in Tucson, Eric Ollason, understands that many of our residents were, and many still are, out of work because of the COVID-19 pandemic, making it difficult to pay their bills.  As a result, nearly 30% of consumers said they are using their credit cards more for day-to-day expenses, like food and self-care items, than they were pre-pandemic.

When cash flows are interrupted, credit cards bear the brunt of our spending, which may help in the short-term, but as balances begin to mount, paying even the minimum requirements can become overwhelming long-term.

With 2020 drawing to a close, and many of the funds made available by the Coronavirus Aid, Relief, and. Economic Security Act, or CARES Act, also ending, our Pima County residents are searching for ways to clear their credit card debt and the stress that comes with it before the New Year.

For some, Chapter 7 Bankruptcy may be the answer.

Am I the Only One with Overwhelming Credit Card Debt?

For more than 20 years, our Tucson bankruptcy attorney has helped people assess their financial standing to develop customized solutions for putting their debt behind them.

As a result, we know how hard it is to ask for help, which is why we provide free consultations to all our residents in need, so they can learn more about our legal resources and how we can help them come to terms with their debt.

You are not alone. We promise.

Overwhelming credit card debt is one of the top three reasons people file for bankruptcy.

Throughout the U.S., total credit consumer card balances are near $895 billion:

  • The average credit card balance is $6,194
  • 61% of consumers have at least one credit card, and the average person has four

Our Arizona residents are no different. If you are searching for ways to eliminate your credit card debt, our bankruptcy lawyer in Tucson may have the solutions you need to move forward with confidence.

Beginning the Process by Assessing Your Income to Debt Ratio

There is more to know about filing for bankruptcy than the fact that it can get rid of your credit card debt.

To determine your eligibility to file for bankruptcy in Arizona, we must begin by evaluating your debts and income from the following documents:

  • Last two years of filed federal income tax returns
  • Last six months of paystubs
  • Credit reports from each of the three credit agencies
  • Copies of all credit card bills currently due
  • Copies of any documents sent by creditors or collectors
  • Copies of any collection lawsuit against you

Next Step: Calculating Your Expenses

Your credit card debt and your monthly expenses are two different figures that must be calculated separately.

To evaluate your expenses, we will need a copy of your monthly bills and the last six months of bank account statements, which may include:

  • Rent or mortgage amounts
  • Home, renters, health, and vehicle insurances
  • Car loan or lease payment
  • Essential utilities, including electricity, gas, or water
  • Non-essential utilities, including cable, internet, or cellphone

We will ask questions about your overall expenses, including medical copays that you may not think are important expenses worth listing, as our experience will uncover spending habits that are vital to your bankruptcy pursuit.

If you are eligible to file for Chapter 7 bankruptcy, our attorney will file all the necessary paperwork and alert your creditors with a notice of your filing.

This notice will prevent them from instituting or continuing any collection efforts against you, including sending letters, phone calls, lawsuits either new or continuing garnishing your wages, or levying your bank account.

What Cannot Be Discharged During an Arizona Chapter 7 Bankruptcy?

One of the most important components of filing for bankruptcy of any kind is the ability to be honest and upfront about your financial situation, and what led you to file bankruptcy.

It is also critical for potential bankruptcy petitioners to know not all debts will be discharged during bankruptcy.

Excluded debts include, but are not limited to:

  • Child or spousal support
  • Most taxes
  • Most student loans
  • Most government fines or fees

If you are overwhelmed by credit card debt and would like to learn more about your bankruptcy options, contact our experienced bankruptcy attorney in Tucson to learn about your rights and options to start fresh by calling (520) 791-2707 or (520) 389-5241 today to schedule a free consultation.

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