Will You Owe Interest Or Penalties On Credit Cards That Are Charged After Filing Bankruptcy?

07 Dec Will You Owe Interest Or Penalties On Credit Cards That Are Charged After Filing Bankruptcy?

IMGP0384Credit cards and loans owed at the time a bankruptcy case was filed are subject to being discharged in bankruptcy, but once a case is filed any new debts that come up after that file date are normally not discharged. The date of filing serves as a cut off date in most Chapter 7 bankruptcy cases, although some limited debts might be addressed in an ongoing Chapter 13 bankruptcy case.

Once a case is filed, debts that are being discharged in a bankruptcy case are technically now a zero balance as of the date a bankruptcy case is filed. If you have filed bankruptcy and have questions about a specific debt in your case, ask your bankruptcy lawyer whether that debt is being discharged or not.

As soon as your case is filed, all collection efforts should stop on debts owed on the date of filing. Creditors should not send any statements asking for payment on general unsecured debts, but sometimes a bankruptcy debtor will see a statement post filing that shows new penalties and interest that have been added after a case was filed. Since these relate back to a debt that is written off, the penalties and interest will not be owed for most unsecured debts subject to the discharge.

If you are being asked for money or payment by any debts you believe are being (or should have been) discharged in bankruptcy, get a copy of that to your lawyer as soon as possible since creditors are not allowed to try to collect on these debts when as bankruptcy has been filed. An automatic stay forbids them from collecting. If you didn’t have a lawyer, contact one since you may want to pursue legal action against the creditor for violation of the bankruptcy discharge depending on what the creditors do.

See also:

What Do I Do About Collection Calls and Letters AFTER I Filed Bankruptcy? By Chip Parker, Jacksonville Bankruptcy Attorney

Chapter 7 Bankruptcy May Give (Temporary) Relief from Collectors By Susanne Robicsek, North Carolina Bankruptcy Attorney

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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