If you're overwhelmed with credit card debt from Capital One or other banks, know that bankruptcy may be an option for you. The bankruptcy law allows for debtors to seek relief from credit card and other types of debt and find a financial fresh start.
Capital One provides Visa and MasterCard branded to millions of Americans, many of whom have poor credit.
In recent years, Capital One has received attention—and some criticism—for its practicing of issuing multiple low-limit credit cards to sub-prime borrowers. This practice gives those with lower credit scores two or more cards with relatively low limits, such as $300, that add up to high borrowing power—even if they don't have the means to repay.
In fact, because Capital One is one of the largest card issuers and often caters to sub-prime borrowers, it's not uncommon for Capital One credit cards to be included in consumer bankruptcy filings.
Chapter 7 bankruptcy is one chapter of the U.S. bankruptcy code that is designed to liquidate credit card debt, as well as other unsecured debts such as medical debt.
Chapter 7 works by liquidating the debtor's assets to pay creditors—in some cases, selling the items paid for with credit to pay back the bank.
However, the majority of Chapter 7 filers have few or no assets that can be liquidated. Each state provides for some exemptions that debtors are allowed to keep (such as home equity, automobiles, or work tools). Many credit card holders find themselves in financial trouble not because of expensive purchases, but because of interest, fees and penalties that come after the fact.
In a Chapter 13 filing, debtors are able to enter into a structured payment plan that lasts three-to-five years. Chapter 13 is often seen as a good option for those who own a home or other valuable property and wish to keep it, or whose median income level does not qualify them for a Chapter 7 bankruptcy.
A Chapter 13 plan lasts three to five years, and is overseen by the bankruptcy court. The plan is agreed upon by the court, the debtor and all creditors. Sometimes, the bankruptcy court may exclude interest and fees from the repayment plan, leaving only the principal amounts to be repaid.
If you're interested in learning more about how U.S. bankruptcy laws can free you from credit card debt, including Capital One debt, connect with a local bankruptcy lawyer today. By speaking with an attorney in your area, you can determine whether bankruptcy is the right option for you.
Simply fill out our free online evaluation form or call 877-349-1309 to connect with a bankruptcy lawyer today to learn more about your options to eliminate Capital One credit card debt or other debts through personal bankruptcy.