What Won’t Bankruptcy Do For Me?
This is another of the most frequently asked bankruptcy questions and it is important to understand that filing for bankruptcy will not cure all of your financial problems. It is not the right choice for everyone, so it should be understood that bankruptcy will not eliminate certain types of debts, especially those that are secured. Secured types of debt include mortgages and car loans. In addition, filing bankruptcy will not discharge special treatment debts such as alimony, child support, certain student loans, criminal fines and certain taxes.
Many people believe that if they file for bankruptcy it will stop foreclosure and allow them to keep their home. This is partially true. When filing Chapter 7 bankruptcy the automatic stay goes into place stopping all legal actions against the debtor and this includes stopping a foreclosure. Where the confusion comes in is most people don’t understand that the creditor has a right to file a motion for relief of stay with the bankruptcy court. This will allow the creditor to restart the foreclosure process to get their property back. As one bankruptcy attorney put it, you can’t keep it if you don’t pay for it. Any debt that is secured by a piece of property is subject to the creditor repossessing it. So, in the case of a Chapter 7 bankruptcy, filing bankruptcy will stop foreclosure at least temporarily.
Some taxes are dischargeable in a bankruptcy filing. For taxes to be dischargeable when filing for bankruptcy, they must be over three years old and the debtor must be current on their filings with the IRS. This is another reason of why a debtor should use a bankruptcy attorney to file for bankruptcy. A bankruptcy attorney will know what battles to take on and how to achieve a win if possible.
Lately, there has been a lot of interest and individuals trying to discharge student loans in bankruptcy. To discharge student loans, the debtor must prove their lack of ability to ever pay those loans back in their lifetime. Usually, the only way these types of loans are discharged in bankruptcy is in the case of an individual becoming disabled or having health problems that make them unable to work. All these situations should be discussed with a bankruptcy attorney as the results vary by individual situation and court districts.
Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.