Filing for bankruptcy can help give you peace of mind when it comes to overwhelming debt. It can do a lot for your financial situation but there are some things it simply can not do. Learning what it can and can not do for you is important before you file bankruptcy. You may be disappointed thinking your whole slate would be wiped clean and in actuality it will not. Take a look at the things that bankruptcy filing can and can not do before you consider this route.
What Can Bankruptcy Do For Me?
For those who have a great deal of credit card debt, bankruptcy can help you get rid of that debt or get it to a reasonable payment option. Credit card debt is usually unsecured loans which means that the creditor does not have a lien on any of your property. It can help you eliminate this debt which is typically a huge part of a person’s debt situation. This will also typically wipe out any other unsecured debt you may have. It will depend on which chapter you file.
It will also help to stop harassing phone calls from creditors. While trying to collect unpaid debts these callers can be quite nasty. It is their job to try and collect on the debt owed so they do what they can. Filing bankruptcy can help stop those calls and activities.
Filing for bankruptcy can also stop some type of liens but you have to make sure which ones by talking with your attorney. You do not want to assume something will be okay and not be taken away. You want to know what your options are and discuss them with your attorney before making a final decision.
What Will Bankruptcy Not Do For Me?
Bankruptcy will not stop child support or alimony payments from being due. No matter what type of bankruptcy you file you will still owe for these debts. You must pay them in full so you need to have a plan for those debts.
Bankruptcy will not stop certain property from being repossessed. It can eliminate the debt that you owe but your creditor can still take the property into their possession. So be prepared for your items such as your car to be taken away even if you file. The company can still pick it up but your debt will be cleared.
Your student loans are another example of items not covered under bankruptcy filings. In very rare cases they can be cleared but only if you show it causes you “undue hardship”. This is a very hard process to prove. You must show that you can not pay them now nor can you pay them in the future.
You will also not be able to get rid of tax debts in a bankruptcy filing. These debts will still have to be repaid even after clearing your slate of other debts.
The best route to take is to talk with your attorney and see what your plan of action should be. You can become more financially stable and start over if you decide to file for bankruptcy. Be sure to discuss which chapter you should consider filing and also consider all of your debts. If you do not list them in the filing they can not be cleared.
About the Author
Ashley recommends finding yourself good bankruptcy attorneys who have experience dealing with all types of situations. They can help you find the best route to take and get you on the road to financial freedom in no time.