How Can Bankruptcy Help Me Eliminate My Debt?

If you are struggling with your debt, you may be looking at options for a way out. Bankruptcy can be a great option for a financial fresh start. But, how will you know if bankruptcy is right for you? Here’s what you need to about what bankruptcy can do for you:

So, What Does Bankruptcy Do?

Simply put, bankruptcy can be an excellent tool for you to achieve a financial fresh start. Depending under which chapter of bankruptcy you file, it can greatly reduce or wipe out your debt entirely. Also, bankruptcy stops wage garnishments, the majority of lawsuits, and other debt collection contact.

When your case is filed, the court will issue an order called an automatic stay. This will stop most creditor calls, wage garnishments, and lawsuits, but not all. For more information about the automatic stay, click here.

Other Ways Bankruptcy Can Help You

Stop a foreclosure, repossession, or eviction
Wipe out your credit card debt and most unsecured debts that are considered nonpriority debts
It can even wipe out some secured debts. However, you should speak with your attorney, as you will likely need to give up the property

What Can’t Bankruptcy Do?

Bankruptcy will not be able to stop all creditors and it will not eliminate all obligations. For example, you will still need to pay any arrears for your alimony, child support, and most tax debt(s).

1. A secured creditor can still foreclose or repossess a property that you cannot afford.

While, your bankruptcy discharge will eliminate debt(s), it won’t eliminate liens. So, if you have a debt that is secured by a lien or property, bankruptcy can remove your obligation to repay the debt. Speak with your attorney, since the lien will not be removed from the property. Meaning, the creditor can still take the collateral.

2. Child Support and Alimony Obligations cannot be removed and are considered nondischargeable.

You will still owe these debts in full after your bankruptcy. Keep in mind, removing other debt will alleviate the pressure on affording these types of payments. Speak with your attorney about any concerns you may have about your alimony or child support obligations.

3. Most Student Loans are not eliminated

However, they can be discharged in your bankruptcy if you can prove “undue hardship.” Click here for more information on student loans in bankruptcy.

4. Your Tax Debts may not be eliminated through your bankruptcy.

It is very important to speak with your attorney to come up with the best game plan. Click here for more information on your taxes in bankruptcy.

5. Nondischargeable Debts will not be eliminated.

The following list of debts will not be discharged under either chapter of bankruptcy.

1. Any debt(s) you do not list in your bankruptcy. Unless you forget to list a debt, but the creditor learns about the bankruptcy case.
2. Personal injury or death due to intoxicated driving debts will not be discharged.
3. Any penalties or fines that you receive as a punishment (examples: traffic tickets and criminal restitution).

6. Fraud

It is extremely important to be open and honest about your debt and assets when filing for bankruptcy. If you have any debts that resulted from fraud, the court will not discharge the debt and may dismiss your case entirely. Please click here for more information on how to avoid fraud in bankruptcy.

Need More Information?

At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we want you to get to know us. We want you to be sure that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.