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The decision about whether to file bankruptcy is a difficult to decision to make. Will it discharge my student loans? Will I still have to pay off unpaid child support? These are common questions.
People often worry about the lasting effects on their credit history and their ability to borrow money in the future. However, sometimes the advantage of being relieved of debt in a bankruptcy proceeding outweighs the disadvantages. In order to weigh the advantages and disadvantages for yourself, it is important to understand exactly what debts bankruptcy gets rid of for you and which debts will remain your responsibility.
Individuals may file for bankruptcy pursuant to Chapter 7 or Chapter 13 of the United States Bankruptcy Code. Chapter 7 bankruptcy requires the sale of the debtor's nonexempt property and the distribution of the proceeds to the debtor's creditors. Chapter 13 bankruptcy allows debtors with a regular income to keep their property and to come up with a debt repayment plan to satisfy debts over the course of 3 -5 years.
While most debts are satisfied in a Chapter 7 or Chapter 13 bankruptcy discharge, there are certain debts that are likely to remain with the debtor following bankruptcy discharge including:
The degree to which bankruptcy gives a debtor a fresh financial start depends on an individual's specific debts. If most of the individual's debts are government backed educational loans and unpaid taxes, for example, then bankruptcy will not relieve the debtor of his or her obligations.
An experienced bankruptcy attorney will review all of an individual's debts before filing a bankruptcy petition in order to advise a bankruptcy petitioner about which debts are likely to be discharged in bankruptcy and which debts will remain the responsibility of the debtor after bankruptcy. A bankruptcy attorney may be able to renegotiate debts that would ordinarily not be discharged or help a bankruptcy petitioner set up feasible repayment plans so that the remaining debt is not overwhelming.
For all of these reasons, it is important to contact an experienced bankruptcy attorney to discuss your options and to make sure that a bankruptcy will provide you with the fresh start which you are seeking by relieving most, if not all, of your debt.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified bankruptcy lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local bankruptcy attorney to discuss your specific legal situation.