While filing bankruptcy can be a complicated process, it is something debtors should consider. The different types of bankruptcy enable an individual to repay or even wipe out loans and debts. The latter is often the main objective of those looking into debt relief and consumer bankruptcy. A bankruptcy filing (often a Chapter 7 liquidation, but sometimes even a Chapter 13 reorganization) would hopefully involve discharged debt. These terms are just some of the aspects of bankruptcy laws that you must be familiar with. As such, it is important to seek help from a trusted bankruptcy lawyer to understand how to file a bankruptcy petition. Filing for bankruptcy may help you rebuild, have a fresh start at life, and secure your financial future, so make sure you do it right.
When a debt is discharged by the bankruptcy court, it means you no longer have the responsibility to pay off any existing balance related to that debt. After this court order is issued by the judge, such creditor can no longer request any payment for what is owed or proceed with wage garnishment. This way, the discharge allows you to manage your finances.
Filers must complete all phases of a bankruptcy case to qualify for a discharge. He or she must satisfy the conditions and submit the requirements stated in the relevant bankruptcy law to obtain the discharge of the debt. In a Chapter 7 petition in bankruptcy, this includes taking part in credit counseling, filling out all necessary documents and bankruptcy forms, and joining the meeting of the creditors. When filing a petition for bankruptcy under Chapter 13, also included in the requirements for discharge is the completion of the repayment plan. All the above are needed to qualify for a bankruptcy discharge.
Before filing a petition, you must know which types of debt may be forgiven. Under the bankruptcy code, dischargeable debts include credit card debt, certain tax debt, and medical bills. In contrast, debts that are not dischargeable include child support or alimony, student loan debt, other types of tax debt, fines, and penalties. A bankruptcy attorney can evaluate your case and advise you on which of your unsecured and secured debt may be covered.
Once bankruptcy filings are over, the automatic stay will likewise cease to take effect. This means creditors may resume any efforts to collect repayment for unpaid, non-dischargeable debts. Some lenders or debt collectors wrongfully seek to recover a debt that has been discharged. In this case, your legal representative shall report to the federal court and help you obtain protection from any harassment.
Note that declaring bankruptcy does not automatically mean that you are going to have your debts discharged. If your bankruptcy trustee feels that you are not cooperating, he or she may order that your discharge be denied by the judge. Certain actions may make you ineligible for a discharge. This may include not fulfilling the requirements for credit counseling, missing the meeting of creditors, providing inaccurate documents, failure to turn over assets as needed when filing Bankruptcy Chapter 7, and failure to make monthly payments as agreed when you declare bankruptcy under Chapter 13.
It would be expensive to have your case refiled if you were denied a bankruptcy discharge. A debtor would owe a lot more than before filing, so make sure you get a credible bankruptcy lawyer. Bankruptcies must be taken very seriously. Before proceeding to file for bankruptcy, make sure you have the right people helping you. Contact us at Law Offices of Daniela Romero for legal help and assistance with the bankruptcy process.