Credit card debt is one of the most commonly-cited reasons for many debtors when they choose to declare bankruptcy in Nevada. These debts can pile up quickly given the high interest rate commonly associated with credit cards. And because they represent unsecured debt, debtors with high credit card balances may have a lot to gain from the protection provided by bankruptcy. Nevadans are familiar with the weight of heavy credit card debt; a new study shows the state has the 15th highest average credit card debt in the United States.
The study combined data from Experian as well as the U.S. Bureau of Economic Analysis. The researchers reviewed data from 2017 for the study, which was the most recent year available. In total, they reviewed four major factors:
- The cost of living in a state
- The average credit score
- The average number of cards held by borrowers in a state; and
- The average total credit card balance.
Compared to the rest of the country, Nevada ranked 15th for the highest average credit card balance of $6,401. This figure was noticeably lower than Alaska, who topped the list with an average of $8,515 per credit card. At the bottom of the list is Iowa, with an average of $5,155. The study also reflected that Nevada residents with credit card debt have on average three separate cards.
What happens to credit card debt in bankruptcy?
While credit card debt is a common cause for a bankruptcy filing, it is also one of the easiest types of debts to get a discharge for. That is because credit card debt is unsecured. Unlike a car loan, which is secured by the vehicle itself, credit card debt is not associated with an asset that can be repossessed to satisfy the card balance. However, it is becoming increasingly more common for lenders to require some sort of security agreement even on credit cards for borrowers with a bankruptcy in their past.
If a credit card debt is discharged during a bankruptcy proceeding, you will no longer be obligated to pay it. This sort of discharge gives you a chance to start over with a clean slate financially. In fact, it's even possible to get another credit card after your bankruptcy case discharges.
Discover Your Options with a Nevada Bankruptcy Attorney
If you find yourself overwhelmed with credit card debt, the protection provided by a Chapter 7 or Chapter 13 bankruptcy may be what you are looking for. When it comes to filing for bankruptcy, every case is different. That's why it is important to discuss your options with an experienced Nevada bankruptcy attorney before you file. Each type of bankruptcy has its own requirements, and even minor errors in your bankruptcy petition could set back your potential discharge by months. In the worst-case scenario, it's possible an error in your filing could cause your bankruptcy to be dismissed entirely. To avoid these pitfalls, contact the experienced bankruptcy attorneys at Vohwinkel Law to get the answers to your bankruptcy questions.