Bankruptcy Blog

How to Declare Bankruptcy on Credit Cards

Credit card debt can build up quickly until you feel overwhelmed and struggle to make even minimum monthly payments. Interest charges and late fees make the situation worse. Sometimes it’s important to pause and look at your other options. If you’re wondering how to declare bankruptcy on credit cards, there are some simple steps to follow, depending on your circumstances.

The first thing you want to do is hire an affordable and skilled bankruptcy lawyer who can walk you through the steps and bring you out confidently on the other side.  Attorney Jerry E. Smith has helped countless clients get control of their financial situation and make a fresh start.  Whether you file individually or jointly with your spouse, he can assess your situation and explain the best possible options to move forward.

6 Steps: How to file bankruptcy on credit cards

Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.”  Under this grant of authority, Congress enacted the “Bankruptcy Code” in 1978, codified as Title 11 of the United States Code, and laid out a process for bankruptcy.  Here are some steps you’ll want to take:

  1. Talk to a smart and affordable bankruptcy attorney and get legal advice.
  2. Gather all of your important documents, including bank and mortgage statements, loan agreements, investments, credit card statements, medical bills, pay stubs, and other financial materials. Your attorney will need these for filing bankruptcy forms with the court.
  3. Ask your attorney to make sure that all harassing phone calls and letters from creditors cease immediately.
  4. Determine through a means test whether you qualify for Chapter 7 or Chapter 13 bankruptcy and make a decision about which type is best for you.
  5. Complete a required credit counseling for debtors course before filing for bankruptcy, and complete a financial management course before your bankruptcy is discharged.
  6. Appear at a brief and simple “meeting of creditors” proceeding with the bankruptcy trustee before your bankruptcy is complete and debts are discharged.

Get Hope. Get Help. Get Peace of Mind.

Can I declare bankruptcy with my spouse for joint credit cards?

If you’re married, you can file bankruptcy with or without your spouse.  There are advantages and disadvantages to both, depending on your individual situation.  Filing jointly with your spouse is one option, in which case you would list in your bankruptcy petition all of the credit cards you hold jointly.

Indiana is what’s called a “non-community property state.” This means that you can file bankruptcy without your spouse if you want to. Or you can file as a married couple. Examples of non-community property include:

  • Houses, cars, artwork, etc., that you purchased without your spouse as a co-owner
  • Items that you brought into the marriage that were in your name only
  • Mortgages or personal loans that your spouse did not co-sign.

If you hold joint credit cards, it is probably most advantageous to file bankruptcy as a couple. Otherwise, your spouse could still be liable for the credit card debt even after your own individual bankruptcy is filed and discharged.

Different types of bankruptcy available

Bankruptcy is governed by federal laws which are often referred to as the Bankruptcy Code.  For a brief review of Bankruptcy Basics at, read here.  Depending on your financial circumstances, you may want to explore either Chapter 7 or Chapter 13 bankruptcy for filing as an individual or couple.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common and simplest type of bankruptcy protection for individuals. It is often referred to as “liquidation bankruptcy,” which means that assets are often sold to pay secured debt to creditors. Chapter 7 is also sometimes used by small businesses. After liquidating assets to pay secured debt, most or all of your unsecured debt is discharged. This includes credit cards, personal loans, department store credit, and other similar debt. Student loans, alimony and child support typically cannot be eliminated through bankruptcy.  Chapter 7 is codified at 11 U.S.C. §§ 101(41), 109(b).

Chapter 13 Bankruptcy

Often referred to as a reorganization or “wage earner bankruptcy,” Chapter 13 bankruptcy is a process whereby an individual with a steady income but overwhelming debt can pause and reestablish their financial footing while continuing to meet some of their debt obligations. For example, Chapter 13 halts any foreclosure action and allows you to remain in your family home. Chapter 13 allows you to repay a portion of your debt obligation through a court-approved repayment plan. Remaining eligible debt is discharged after you have completed the repayment plan. Chapter 13 can be used to do a personal or business (sole proprietorship) reorganization.  Chapter 13 is codified at 11 U.S.C. § 1322(d).

How long does it take when filing bankruptcy on credit cards?

Generally, Chapter 7 bankruptcy takes less time to file than does Chapter 13. That’s because Chapter 7 is a much simpler process and does not require the creation of a court-approved repayment plan. Typically a Chapter 7 bankruptcy can be completed within a few months, while a Chapter 13 can take 6-12 months. Some of this is determined by the complexity of your financial situation and the nature of your debts.

An affordable bankruptcy lawyer who puts clients first

Attorney Jerry E. Smith understands that sometimes bankruptcy happens to good people despite their best efforts.  Job loss, catastrophic illness, and other unexpected setbacks can cause debts to pile up quickly.  Some people feel ashamed, while others worry about whether  they can go to jail for credit card debt.  All of these worries and fears can result in sleepless nights and stress on the family

Attorney Jerry E. Smith does everything he can to make the bankruptcy process smooth and stress-free. He offers weekend/evening appointments as well as same-day filings if possible. To find out more about how he can help, call him for a free initial consultation, up to one hour, at (317) 917-8680. It’s time to make a fresh start!

Attorney Jerry E. Smith

Attorney & CPA Jerry E. Smith practices bankruptcy law and tax resolution. Smith’s practice focuses on representing consumer debtors and assisting them in getting a fresh start by reorganizing or eliminating their debt and attempting to put them in the best financial position possible. Mr. Smith has been practicing law since March 1, 2009. Before that, he was and still is a real estate investor. He also previously worked as a Cost Accountant, Financial Analyst, and Internal Auditor for two large multi-billion-dollar international consumer product companies. [ Attorney Bio ]