How to File for Bankruptcy After Consolidating Credit Cards
A credit card consolidation works as a type of loan used to pay off credit card balances in order to make one monthly payment to a loan company instead of several payments to credit card companies. The interest rate on a consolidation loan is usually lower than the interest rates on multiple credit cards. Credit card debt acts as unsecured debt in a bankruptcy, meaning there is no collateral securing the loan. Unsecured debt can be included in a bankruptcy plan.
- Difficulty:
- Moderately Easy
Instructions
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List your credit card consolidation loan on your bankruptcy petition matrix. The matrix is a list of creditors you wish to include in your bankruptcy plan. By listing a credit card consolidation loan company on your matrix, the loan company will be notified by the bankruptcy court that you are filing bankruptcy.
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Propose a bankruptcy plan. With the help of an attorney, depending on what chapter of personal bankruptcy under the United States Bankruptcy Code you are filing, your credit card consolidation loan will be included in your bankruptcy plan. Once your plan has been written, it must be proposed to a trustee, who will make a recommendation to the bankruptcy judge.
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Confirm your bankruptcy plan with the bankruptcy court, and complete the terms of the plan to reach a discharge. Your bankruptcy plan must be approved by the bankruptcy court. Once it has been confirmed, you must complete the terms of the bankruptcy before you can reach a discharge. A discharge means that your bankruptcy has been successful and all debts have been discharged under the bankruptcy plan, including any pre-petition credit card consolidation loans.
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