Bankruptcy Attorneys Can Help You Get Rid of Debt
Bankruptcy eliminates most, but not all debts. Before filing, you should learn which debts are dischargeable and which are not. In most cases, you can discharge credit card debts with Chapter 13 and Chapter 7, but alimony, child support, student loan and tax debts will remain. Below, we at Carltonlegalservices.com will explain how different kinds of debts are handled during bankruptcy.
Bankruptcy: What it Can Do
If you are in severe debt, bankruptcy can be a useful remedy. It can:
* Wipe out your unsecured debts. Bankruptcy can usually wipe out credit card debt, unless it is carried on a secured card. With unsecured debt, there is no lien on your assets, and creditors cannot seize them if you default.
* Stop creditor collection and harassment. Bankruptcy is a good way to put a stop to harassing creditor actions, but simple harassment (letters and phone calls) is easy to stop.
* Eliminate some liens: Liens are the creditor’s right to seize a portion (or all) of your assets, and these survive bankruptcy filing unless you and your attorney follow certain procedures during your case.
What Bankruptcy Cannot Do
Below are some of the things bankruptcy cannot accomplish:
* Prevent secured creditor asset seizure. Discharges eliminate debt, but they do not get rid of liens against your property. If you have a secured debt a creditor can repossess your property, but the bankruptcy eliminates the debt.
* Eliminate spousal support and child support arrearages. These obligations always survive bankruptcy, and if you file for Chapter 13, your payment plan must provide for the full payment of these debts.
* Eliminate student loan debt. You can only discharge student loan debt if you can demonstrate that repaying it would cause severe hardship–which is a difficult standard. You must prove that you can’t afford to repay the loan now, or at any time in the foreseeable future.
* Get rid of non-dischargeable debts, such as those you forgot to list in your bankruptcy paperwork, debts caused by intoxicated driving, traffic tickets and criminal restitution.
If you file for Chapter 13, the above debts must be fully repaid. Those filing for Chapter 7 will still have to deal with them when the case is complete. Bankruptcy Attorneys can recommend the bankruptcy type that fits your financial situation.