In many cases, bankruptcy will not erase every debt that you have. That does not mean that you do not have something to gain from the process though. A Rockland County Chapter 7 bankruptcy lawyer from our firm can help you take a closer look at your financial situation to see if this is a good method for dealing with your debt and getting a fresh financial start.
What Debts Can I Erase Through Bankruptcy?
You can erase many types of debt through the bankruptcy process. Some of the most common types of debt that people want to wipe out includes:
- Credit card debt
- Debt from personal loans
- Past-due rent
- Money you have been ordered to pay in civil court judgments
- Overdue utility payments
- Medical debt
- Any accounts from collection agencies
However, you should keep in mind that a creditor can challenge you when you try to go through the bankruptcy process if they suspect fraud. If you lie when applying for a credit card or loan, or if you use credit with no intention of paying it back, it may be difficult to erase that debt.
Can I Erase Student Loans Through Bankruptcy?
One unfortunate thing about bankruptcy is that it can rarely help with student loans. They cannot be discharged in bankruptcy in most cases, unless you cannot work due to a permanent disability or you can show that the loans create undue hardship. It is rare to see student loans erased for either reason though.
Can Divorce Complicate My Bankruptcy?
If you have recently gotten divorced, you may have payments that you have been ordered to make. Child support and spousal support, and any back payments you owe on them, do not get wiped out when you file for bankruptcy. You still have to make these payments and any others that have been mandated by a court. For example, if you were ordered to pay legal fees for your spouse as a part of the divorce agreement, bankruptcy will not erase that.
Are There Other Debts That Cannot Be Erased by Bankruptcy?
There are a few other debts that cannot be erased by the bankruptcy process. An important category of debt to know about is secured debt. Secured debt is backed up by an actual item, like your home or car. You cannot clear this debt away unless you give up the item you purchased with your loan. Many people go through bankruptcy and choose to keep making payments on their car or home so that they can keep it.
You also cannot clear restitution, money that a court has ordered you to pay to someone you harmed financially or physically, from your record. Many tax debts are also likely to survive the bankruptcy process.
Schedule a Consultation Today
When you are ready to learn more about your options, contact the Lauterbach Law Firm. We can schedule a consultation and tell you more about the bankruptcy process and whether or not this is the right path forward for you.