Posted on 01 09,2014

When credit card debt has gotten out of control, it can be difficult to figure out what to do. Some people, in an effort to be honorable, have cashed out retirement funds to pay off credit cards or overdue debt, thereby creating another debt – this time to the most relentless debt collector of all – the IRS. Did you know that when you file for bankruptcy, your retirement accounts are exempt? Before you make any decision about cashing out the savings you have set aside for retirement, it is worth looking into filing for bankruptcy protection.

The federal bankruptcy laws were put in place so that debtors that had no hope of being able to pay off what they owe could get a fresh financial start. The statistics on how many people have filed for bankruptcy in recent years are staggering – more than 1.2 million in 2012, down from 1.4 million the year prior. What was once considered a rare occurrence has become commonplace. Many of your friends, neighbors and associates have probably already filed for bankruptcy and are now enjoying the benefits – freedom from crushing debt.

Credit card debt is discharged in Chapter 7 bankruptcy. There are restrictions regarding what credit card debt is eligible, and it is not advised that you max out your cards before you file, as any recent purchases will not be included. Most people who file for bankruptcy protection have not had the use of their credit cards for some time, and all of that debt can be discharged. Imagine the freedom you could experience if you did not owe the credit card companies anything!

Filing for bankruptcy is a big decision, and it may or may not be right for you. At McCormick & Calderón in Virginia Beach, we can review your situation and let you know if there is a better solution for your specific situation. We offer legal services in bankruptcy as well as the various alternatives to bankruptcy. If you are dealing with credit card debt that you have no hope of paying off, it may be time to speak with us about getting rid of it, once and for all. Contact David McCormick Law Group today for more information about debt-related problems. We are here to get you back on the road to financial health.

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