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Will Bankruptcy Wipe Out All of My Personal Debts?

December 15th, 2020 at 1:25 pm

debtThe United States is a notoriously consumeristic society. Having good credit is a necessity to buy a home and a reliable vehicle. Credit must be built, often through the usage of credit cards and the ability to repay the credit card debt. Sometimes, however, we accumulate debt and get in too far over our heads. Other times, a major unforeseen life event occurs—one which we are unprepared to handle financially. When this happens, filing for bankruptcy may help struggling individuals and families. When considering bankruptcy, the first question on many minds is, “Will it get rid of all of my personal debts”?

Understanding Bankruptcy

Bankruptcy is a federally approved process through which an individual or a company can reduce their debt. Those who are authorized for the process may have debts written off or repaid under a new agreement. The method used depends directly on the type of bankruptcy approved. The most typical forms of the process are Chapter 11 for businesses or Chapter 7 or Chapter 13 for private consumers, although others are available under appropriate circumstances. These chapters refer to the specific section of the United States Bankruptcy Code that will apply in a given case. Meanwhile, while the process is underway, all collection activities related to your debts—including lawsuits and foreclosure proceedings must stop.

Will All Debts Be Cleared?

If you are wondering whether bankruptcy resets your credit, enabling you to begin as though the debt never occurred, the answer is “no.” Filing for bankruptcy allows those who meet eligibility requirements to rid themselves of some but not all debt. Financial obligations that do not typically qualify to be wiped clean are child support, alimony, taxes, student loans, and secured debt. Although they may not be totally discharged, some may be eligible for a restructured payment plan. Some of the most common discharged liabilities include:

  • Unsecured debt
  • Credit card balances
  • Income tax debt
  • Medical bills

Why Might You Choose Not to File Bankruptcy?

What prevents consumers from racking up unrepayable amounts on credit cards, filing for bankruptcy, and doing it again? It is illegal for employers to discriminate against those filing for bankruptcy, and many things, such as your house, could be exempt from being seized as you progress. However, possible disadvantages do exist, which may give cause you to look for bankruptcy alternatives. These potential drawbacks include:

  • Not all debts are eligible for discharge through bankruptcy.
  • Your circumstances will determine if your home or car must be sold to pay off your debts.
  • Depending on the type of bankruptcy, it can remain on your credit reports for up to ten years, preventing you from obtaining loans and causing increased interest rates.

A Texas Bankruptcy Attorney Can Help

You may know a relative or a friend who told you that filing for bankruptcy wiped away all of their stress and was the best decision they ever made. That is excellent news. However, it is not the right solution for every case. Your financial situation is as unique as your thumbprint, and it requires the assistance of a trained professional to analyze each detail and weigh the options. If you would like help determining if bankruptcy is the best solution for you and your family, contact an experienced San Antonio bankruptcy lawyer at the Law Offices of Chance M. McGhee. Call 210-342-6400 for a free consultation.

 

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics

Debt Dilemmas: Common Concerns about Chapter 13 Bankruptcy Process

July 10th, 2015 at 7:10 pm

Texas chapter 13 lawyer, Texas chapter 7 attorney, Texas bankruptcy lawyer, There are many options available to Americans who want to resolve their debts, but for those who wish to avoid a mass liquidation of assets, chapter 13 bankruptcy may be the answer. If you are struggling with insurmountable debt, you likely have many questions and concerns about the chapter 13 bankruptcy process.

An experienced bankruptcy attorney can evaluate your situation, address your concerns, and provide recommendations for debt relief. In the meantime, here are three common questions about chapter 13 bankruptcy:

Will I Lose My Property?

Many first-time bankruptcy filers confuse chapter 7 and chapter 13 bankruptcies. Unlike chapter 13, chapter 7 bankruptcy involves liquidating assets to pay creditors. However, chapter 13 filers can keep their assets and instead pay debts through a structured repayment plan, according to Uscourts.gov.

What If I Cannot Keep up with My Payments?

Chapter 13 works by restructuring your debt into a more manageable payment plan that takes into account your total debt owed and your ability to pay. In some cases, it is possible to modify a repayment plan; however, debtors who cannot keep up with payments may eventually have to transfer their case to chapter 7 bankruptcy.

How Does Chapter 13 Bankruptcy Affect Tax Debts?

Bankruptcy laws treat credit card bills, mortgages, and similar debts differently than federal and state tax debts. However, chapter 13 bankruptcy places all of these debts – including tax debt – into the applicant’s payment plan.

If you are struggling with debt and want to know if chapter 13 bankruptcy is right for you, contact the Law Offices of Chance M. McGhee. With more than two decades of experience as a skilled San Antonio bankruptcy lawyer, Mr. McGhee has the resources to guide you through the bankruptcy process. Call our office today for a free consultation at 210-342-3400.

Call today for a FREE Consultation

210-342-3400

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