>> Dec 31, 2015
Definitely, bankruptcy is a perfect option when you are unable to pay your debts. However, filing for bankruptcy doesn’t mean you are free from all your debts. This is the reason why it is recommended to know, which debts will be wiped out along with the ones that will be left, before filing bankruptcy.
What filing bankruptcy can do for you?
Help you wipeout unsecured debts: Bankruptcy can really prove to be helpful when it is about wiping out credit card debts. Unless you have a “secured” credit card debt, it is considered as unsecured. This means the creditor cannot liquidate your property or repossess it to recover their money. Apart from credit card debts, you may also have other unsecured debts and bankruptcy can surely eliminate those too. Your bankruptcy attorney San Diego can help you understand this better.
On the other hand, if you file for Chapter 13 bankruptcy, you will need to pay a few amounts of your unsecured debts too. However, if by the end of your repayment plan any unsecured debts are still unclear, they will get completely discharged.
Stop creditor harassment: If the harassment caused by creditors is simple like letters or phone calls, you may not need to file bankruptcy since there are other simple ways too. However, if the creditor attempts to liquidate your property or repossess it, bankruptcy can really help you.
Will help in eliminating liens: In simple words, a lien is the creditors right to take some or all your property in order to recover his/her money. If you involve certain procedures in your bankruptcy case, you can surely eliminate liens.
What filing bankruptcy cannot do?
It cannot prevent secured creditors to repossess your property: Bankruptcy does not completely eliminate liens. If you have acquired a secured debt, bankruptcy may help you wipeout the debt, but it cannot prevent the creditor to repossess your property.
It cannot eliminate child support or alimony: These types of obligations survive bankruptcy. These obligations can never be eradicated and you will own these debts in full like you never filed bankruptcy.
It cannot wipe out students loans: Well, students loans are not discharged in bankruptcy, unless you prove in court that paying them will cause you “undue hardships”. You must be able to prove that nor you can afford to pay them now nor will you be able to pay them in future.
It cannot eliminate tax debts: Discharging tax debts in bankruptcy is challenging. Unless, the debts are not too old, you cannot discharge them.
Some non-dischargeable debts are:
- Debts you did not mention in your bankruptcy paper work.
- Debts for personal injuries caused by you because of intoxicated driving.
- Fines and penalties imposed on you for violating any laws.
- Debts which were obtained by producing fake information.
Bankruptcy can certainly stop collection activities, eliminate unsecured debts, and help you to organize your debts, but taking some legal advice will always help in understanding the concept more clearly.