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How Can I Clear All My Debts?!

If, like many Americans, you've been struggling with debt, you may be asking yourself "Is there a way to clear all my debts?" While this seems like a distant fantasy, filing for bankruptcy may help you clear some or all of your eligible debts.

Through Chapter 7 bankruptcy, you may be able to eliminate some or all of your unsecured debts. On the other hand, Chapter 13 bankruptcy may allow you to catch up on debts and find balance in your finances.

To learn more about clearing your debts through personal bankruptcy, simply fill out the form below and connect with a local bankruptcy lawyer for a free consultation.

Clearing Debts Through Chapter 7

If you have limited assets, and are looking for a fast, efficient way to try to clear debt, Chapter 7 bankruptcy may be a good place to start.

Chapter 7 bankruptcy allows filers to discharge some or all of their unsecured debts. Types of debts that are considered unsecured include:

  • Credit card bills
  • Medical debt
  • Payday loans
  • Some personal loans

In addition to potentially eliminating these types of debt, filers will also receive the benefit of the automatic stay, which prevents creditors from harassing them while they go through the bankruptcy process.

Keep in mind, however, that Chapter 7 is reserved for people of limited means. The Chapter 7 means test is used to determine eligibility to file for Chapter 7 and a bankruptcy attorney can explain how the means test works.

Clearing Debts Through Chapter 13

Of course, Chapter 7 is not designed for everyone. If you've found yourself thinking, "I'd love to clear all my debts, but I want to keep my house and car," then Chapter 13 may be a better fit for you.

Through a Chapter 13 filing, you and the bankruptcy court will consolidate your eligible debts into a more reasonable payment plan. Then, you will make monthly payments to a trustee, who will deal with your creditors during the bankruptcy process.

If, at the end of this period, you have made consistent payments to your creditors, the bankruptcy court may also discharge more of your unsecured debts.

In addition, by making regular monthly payments on your debts, you may be able to:

In order to obtain the benefits of Chapter 13, though, you need to have a steady source of income, either through wages or a pension. If you qualify for Chapter 13, you may soon find yourself headed towards a debt-free future.


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