Credit Card Debt and Bankruptcy in St. Louis

Credit card debt is the most common unsecured debt eliminated in bankruptcy. Here is how it works for St. Louis residents filing in the Eastern District of Missouri.

Can Bankruptcy Eliminate Credit Card Debt?

Yes. Credit card debt is general unsecured debt. In Chapter 7, most balances are completely discharged. In Chapter 13, you pay a percentage through your 3-5 year plan and the rest is discharged.

Chapter 7 vs. Chapter 13

Chapter 7

Credit card debt typically 100% discharged
No repayment on unsecured debt
Completed in 3-4 months
Must pass means test (Missouri median: $56,847)

Chapter 13

Pay a portion through 3-5 year plan
Remaining balance discharged at completion
Amount depends on disposable income
No income limit -- must have regular income

Fraud Exceptions (section 523(a)(2))

Luxury goods over $800 within 90 days -- presumed non-dischargeable
Cash advances over $1,100 within 70 days -- presumed non-dischargeable
Fraud: Credit obtained with no intent to repay or false application

These are rebuttable presumptions. Creditors rarely challenge small balances.

Before Filing

Stop using credit cards -- recent charges may be scrutinized
Do not transfer balances right before filing
Do not pay favorites -- payments over $600 within 90 days can be recovered
Keep statements for your schedules
Complete credit counseling within 180 days before filing

Missouri Considerations

Missouri's relatively low exemptions (especially the $15,000 homestead) mean more property may be at risk in Chapter 7. Chapter 13 may be a better option for homeowners with significant equity.

Homestead: $15,000 | Vehicle: $3,000
Garnishment limit: lesser of 25% of disposable earnings or amount exceeding 30 times the federal minimum wage

If creditors are suing over credit card debt, filing triggers the automatic stay, stopping all collection immediately.

Frequently Asked Questions

Can bankruptcy eliminate all my credit card debt?

In most cases, yes. Credit card debt is fully dischargeable in Chapter 7. In Chapter 13, you pay a percentage and the rest is discharged. Exceptions exist for recent luxury purchases and cash advances.

Will credit card companies object?

Rarely. Objections require evidence of fraud. For typical consumer debt, they are uncommon.

How long after bankruptcy can I get a credit card?

Many people receive offers within months of discharge. Secured credit cards are available almost immediately for rebuilding credit.

Does bankruptcy affect my credit score?

Chapter 7 stays on your report 10 years, Chapter 13 for 7 years. Most filers see scores recovering within 1-2 years.

Should I stop paying cards before filing?

Consult an attorney. Payments on dischargeable debt are generally unnecessary, but stopping can trigger collection activity.