The Impact of Bankruptcy on Credit Card Debt
June 4, 2025 By: Carrie Weir
Can Credit Card Debt Be Permanently Discharged? Do You Have To Return Goods Purchased?
One of the most common causes of personal bankruptcy is unmanageable credit card debt. Can you permanently discharge credit card debt in a Chapter 7 bankruptcy petition? Are there ever circumstances where you must return the merchandise purchased with the credit card?
Can You Discharge Credit Card Debt in a Chapter 7 Filing?
As a general rule, Chapter 7 bankruptcy can help you permanently eliminate credit card debt. It’s not an absolute right, though, and depending on the circumstances, you may be required to:
- Return any property that has been pledged as collateral—While most credit card debt is “unsecured,” or not tied to any collateral, there are a few situations where your “credit card” is actually secured. For example, if the credit card company requires that you keep a certain amount in a savings account, it’s likely a secured debt. In such a situation, the amount in the savings account will go to the credit card company to cover what you owe.
- Be financially responsible for any cash advances or luxury items obtained within a certain time frame of your bankruptcy filing—Generally, if you use your credit card to purchase non-essential goods with a value of more than $800 within 90 days of your bankruptcy filing, you can’t discharge the debt. The same applies to cash advances of more than $1,100 within 70 days of filing.
- Be financially responsible for any credit card debt obtained by fraud—If you falsified information to obtain a credit card, you may be required to take financial responsibility for any debts amassed on the credit card.
Contact an Experienced Rockwall, TX Chapter 13 Bankruptcy Attorney
Let us help you take the right steps and make good decisions when filing for personal bankruptcy protection. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.