Credit card debt has a way of growing faster than you expect—especially with rising interest rates, unexpected expenses, or periods of unemployment. If you’ve found yourself buried under thousands of dollars in balances, minimum payments that barely make a dent, and constant collection calls, you’re not alone. And more importantly, you do have options.
At Law Offices of Terrence Fantauzzi, we help individuals across Southern California use bankruptcy to eliminate or restructure overwhelming debt, including credit card balances. If you’re wondering whether bankruptcy can help you clear your credit card debt for good, here’s what you need to know.
What Type of Debt Is Credit Card Debt?
Credit card debt is considered unsecured debt, meaning it isn’t tied to any collateral (unlike a mortgage or car loan). This classification is important because unsecured debts are often the easiest to discharge—or wipe out—in bankruptcy.
Depending on your income, assets, and overall financial situation, bankruptcy can:
- Erase your credit card debt entirely (Chapter 7)
- Consolidate and reduce it through a structured repayment plan (Chapter 13)
Let’s break down how each option works.
Using Chapter 7 to Discharge Credit Card Debt
If you qualify for Chapter 7 bankruptcy, you may be able to eliminate 100% of your eligible credit card debt—along with other unsecured debts like medical bills and personal loans.
Here’s what to expect:
- You must pass the means test, which compares your income to the median in California
- The process usually takes about 3 to 4 months
- You don’t have to pay your credit card companies anything
- You may be required to surrender non-exempt property, but most filers keep everything they own by using California’s exemption laws
It’s a powerful solution for people with high unsecured debt and limited income.
Using Chapter 13 to Manage Credit Card Debt
If you have too much income or want to protect valuable assets like a home or business, Chapter 13 bankruptcy might be the better option.
In Chapter 13:
- You propose a 3- to 5-year repayment plan based on your income and expenses
- You may only pay back a portion of your credit card debt
- The remainder is typically discharged at the end of the plan
- Creditors must stop collections while you make payments through the court-approved plan
This option is ideal if you’re trying to catch up on mortgage or car payments while dealing with significant credit card balances.
What Bankruptcy Can’t Do
Bankruptcy can eliminate credit card debt—but it can’t fix everything. Here are a few limitations:
- Recent charges for luxury goods or cash advances may not be dischargeable
- Fraudulent use of credit (such as lying on applications or using cards while intending to file) can lead to objections
- Co-signers may still be liable unless they also file for bankruptcy
That’s why it’s important to speak with an experienced attorney before you make any big financial moves.
Will Filing Ruin My Credit?
Filing for bankruptcy does impact your credit score—but if you’re already struggling with late payments, maxed-out cards, and collections, your score may already be suffering.
The upside? Bankruptcy gives you a clean slate. Many people start rebuilding their credit within months of filing. And unlike endless minimum payments, bankruptcy offers a definitive end to your financial stress.
Talk to a Bankruptcy Lawyer Before Your Debt Gets Worse
Credit card companies rely on high interest and fees to keep you trapped. Bankruptcy breaks the cycle.
At Law Offices of Terrence Fantauzzi, we’ve helped hundreds of Southern California clients eliminate credit card debt and move forward with confidence. We’ll help you understand whether Chapter 7 or Chapter 13 is right for you—and make sure you protect your assets, your peace of mind, and your future.
Call Law Offices of Terrence Fantauzzi today at (909) 552-1238 to schedule a confidential consultation. Relief is possible—and we’re here to help you find it.
