Credit Card Debt in Bankruptcy

Can Credit Card Debt be Discharged or Eliminated in Bankruptcy? Understanding the Options in South Carolina Bankruptcy Court

Facing a mounting pile of credit card debt can be overwhelming, leaving many individuals in dire financial straits. In such desperate circumstances, bankruptcy may seem like the only solution to get a fresh start. However, the question arises: can credit card debt be discharged or eliminated in bankruptcy? Or in other words, can credit card debt be wiped out or forgiven in bankruptcy? In this comprehensive guide, we will delve into the possibilities and explore the different types of bankruptcy and their effects on credit card debt.

  1. Understanding Bankruptcy:

Bankruptcy is a legal process that allows individuals or businesses burdened with excessive debt to find relief and reorganize their finances. There are two primary types of bankruptcy for individuals in South Carolina Bankruptcy Courts: Chapter 7 and Chapter 13.

  1. Chapter 7 Bankruptcy and Credit Card Debt:

Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” involves the liquidation of assets to repay debts. However, some assets may be exempted from liquidation, depending on state laws. The good news for those struggling with credit card debt is that unsecured debts, like credit cards, are generally dischargeable and wiped out in Chapter 7 bankruptcy.

Credit card debt, being unsecured, is considered one of the top candidates for discharge. Once the bankruptcy court approves the discharge, the debtor is no longer legally obligated to repay the debt, providing a fresh financial start.

  1. Chapter 13 Bankruptcy and Credit Card Debt:

Chapter 13 bankruptcy, also known as “reorganization bankruptcy,” differs from Chapter 7. Instead of liquidating assets, the debtor proposes a repayment plan to creditors over three to five years. The repayment plan is based on the debtor’s income and allows them to keep their assets while working to repay their debts.

Under Chapter 13 bankruptcy, credit card debt is included in the repayment plan, and debtors may not have to repay the full amount owed. Once the repayment plan is successfully completed, any remaining credit card debt may be discharged.

  1. Exceptions to Credit Card Debt Discharge:

While credit card debt is generally dischargeable in bankruptcy, certain exceptions exist. If a debtor incurred credit card debt through fraudulent means or knowingly made false statements, the court may not discharge these debts. Additionally, luxury purchases made right before filing for bankruptcy may be deemed non-dischargeable.

  1. Impact on Credit Score:

Filing for bankruptcy does have significant implications on a person’s credit score. A Chapter 7 bankruptcy remains on a credit report for ten years, while Chapter 13 remains for seven years. This can make it challenging to obtain new credit or loans in the near future.

However, it’s essential to remember that if a debtor is already struggling with significant credit card debt and late payments, their credit score may already be negatively impacted. Bankruptcy offers a chance to rebuild credit over time by demonstrating responsible financial behavior.

  1. Seeking Professional Advice:

Navigating the complex waters of bankruptcy and credit card debt discharge can be daunting. Seeking the counsel of a qualified bankruptcy attorney can provide invaluable guidance, ensuring all options are explored and the best course of action is taken.


In conclusion, credit card debt can be discharged in bankruptcy, providing a lifeline to those drowning in financial obligations. Chapter 7 and Chapter 13 bankruptcy offer different routes to debt relief, allowing individuals to regain control of their financial future. While bankruptcy has long-term effects on credit scores, it is a legitimate and essential tool for those overwhelmed by credit card debt. Seeking professional advice is crucial to understanding the nuances of bankruptcy and making well-informed decisions to pave the way towards a debt-free future. Remember, it’s never too late to take control of your finances and build a stable financial foundation for tomorrow. Feel free to call us to set up a free consultation.

Stone Law Firm has offices in Columbia, Spartanburg, and Greenville. However, we represent people from all South Carolina cities to include Spartanburg and Charleston


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