What is the effect of filing Chapter 13 Bankruptcy on my credit cards?

When you file for Chapter 13 Bankruptcy in California, it will have a major impact on your credit cards. The effect is similar to that of other types of bankruptcy filings; when you file, your credit card debt will be handled by the court-appointed trustee. The trustee has the power to negotiate with creditors on your behalf and may be able to reduce the amount that you owe on some of your credit cards. During the duration of your repayment plan, credit card companies may not be able to take legal action against you, such as filing a lawsuit. This will give you a period of time to catch up on your payments without having to worry about legal action. Your credit card company will also have to report the bankruptcy filing to the credit bureaus. This action can have a negative effect on your credit score. Your credit score will initially suffer a significant drop and then slowly recover as you make timely payments on your repayment plan. In addition, you may find that other creditors are less willing to lend you money for purchases or other purposes because bankruptcy stays on your credit report for 7 or 10 years, depending on the state in which you filed. The bottom line is that filing for Chapter 13 Bankruptcy in California will have a serious impact on your credit cards. But if you are able to make timely payments on your repayment plan, you can rebuild your credit score over time.

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What is the effect of filing Chapter 13 Bankruptcy on my credit cards?

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