Most people decide to file bankruptcy in order to get a fresh financial start. But while it does help to reduce serious debt, this process does not automatically eliminate all monetary obligations. Depending on the laws in your state, there are certain items that can be included in a bankruptcy filing and others that cannot.
Bankruptcy may be a good way to get rid of credit card debt. In fact, the Chapter 7 bankruptcy process is designed exactly for debts of this nature. Since it is usually considered an unsecured debt, creditors typically aren't able to place a lien on your property if you're unable to pay your bills, and they aren't able to repossess any of your belongings.
If you have other unsecured debt in addition to credit cards such as unpaid medical bills, they could be erased as well.
By filing for Chapter 13 instead of Chapter 7, however, you may be required to pay back some of the unsecured debt. But any of the debt that remains after your payment plan is complete could be discharged.
If you're facing foreclosure on your home, bankruptcy could be a reasonable option. The start of a bankruptcy case, if it's filed before the foreclosure date, can stop this sale from happening.
With Chapter 13, you may make monthly payments and bring your loan up to date. Depending on the laws in the state where you live, this method could give you the chance to meet the necessary requirements to keep your property.
There are many things to keep in mind if you have a car loan and file for bankruptcy. If you can't afford the payments and you owe more than the automobile is worth, Chapter 7 may allow you to surrender the vehicle without spending another cent on this investment.
Another option is to redeem the car. This means you agree to buy the car back from the bank or credit union for the automobile's fair market value in a lump sum payment.
For more specific information on the bankruptcy laws in your state, you can speak with an attorney today. Just fill out the form below and arrange a free, no-obligation consultation with a local bankruptcy lawyer.
Disclaimer: The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or should be formed by use of the site. The attorney listings on the site are paid attorney advertisements. Your access of/to and use of this site is subject to additional Supplemental Terms.