This last year has been a challenging year for many people. You may feel like you are hopeless and have nowhere to turn to except bankruptcy. While that may be true, you want to do your research to find out exactly how much of your debt will be wiped through bankruptcy. Then you can weigh the positives and negatives and find out if bankruptcy is right for you.
Does Bankruptcy Erase All Debt?
Whether you are filing for Chapter 7 or Chapter 13 bankruptcy, some debts will not be cleared. And remember that all bankruptcy filings come with limitations for rebuilding your life and credit score in the future. You want to be sure bankruptcy is worth it.
What Debts Are Not Cleared by Bankruptcy Filings?
If your debilitating debt falls mainly under these categories, bankruptcy may not be your best option.
1. Student Loans: Loans taken out to pay for school have to be paid back, regardless of a bankruptcy filing.
2. Credit Card Charges Right Before Bankruptcy: If someone charges up their credit card right before filing for bankruptcy, that is considered taking advantage of the process. Those debts will not be forgiven.
3. Tax Debts: If you have tax dues from income tax that are less than 3 years old, you will not be able to clear those debts.
4. Child Support and Alimony: Your duty to pay child support and alimony cannot be erased by filing for bankruptcy.
5. Debts from Illegal Acts: If you fall into debt through embezzlement or the damage of someone’s property, bankruptcy will not clear the payments that are required to make things right.
Look into the details of Chapter 7 and Chapter 13 bankruptcy to find out how it would reduce your monthly payments and help you rebuild after a financial crisis.
If you are suffering from financial hardships and need help with your next steps, contact Miles & Hatcher, LLP, for assistance. Bankruptcy may not be your best option. You can call today to schedule a free consultation and find out what your options are: (909) 481-4080.