Many people who stop paying their credit card bills and other debts eventually find themselves at the wrong end of a lawsuit. The creditor or perhaps a debt buyer after collection attempts such as phone calls and threatening letters fails to bring in payment from the borrower decides to file a lawsuit for money damages. These collection lawsuits are very common and the Judgments from the lawsuits are enforceable in California for 20 years.
A common question that I seem to get from clients is whether credit card debt can be discharged in a bankruptcy. As a bankruptcy attorney many of the cases that I handle involve some amount of credit card debt. My answer to this common bankruptcy question is often the same. As a general rule credit card debt is dischargeable. However, that is a general rule and there are some exceptions that must be considered before filing a bankruptcy.
Bankruptcy is a legal process whereby a person or business requests relief from their debts. The law allows a person or business to discharge (ie eliminate) various types of debts. Common debts would be credit cards, medical bills, auto repossessions, foreclosures, civil judgments, and even old tax debts. However, just because a person has debts does not automatically mean a bankruptcy is the best solution. There are numerous other factors to consider before the decision to file bankruptcy should be made.