Bankruptcy helps a lot of people eliminate their debt, or catch up and reorganize their debt to make it more manageable. There are limitations to what bankruptcy can actually do for you.
Bankruptcy cannot eliminate certain types of secured debt. If you plan to keep your home or car, you will have to work out a court-approved payment plan and continue to make the payments during and after your bankruptcy case. Your Dallas bankruptcy attorney will advise you how to proceed with your case to keep your assets.
You will receive immediate relief from most creditors when you file for bankruptcy. You will not, however, receive a “clean slate.” A bankruptcy will remain on your credit report for up to ten years making you an unlikely prospect for obtaining a loan. This gets better with time, so when you are ready to start making large purchases again, you will have had the time to prove yourself a worthy loan candidate by making your payments on time.
Student Loans and Back Taxes
Most courts are reluctant to discharge student loans and current or recent taxes due. If you can prove that your student loans are causing an undue hardship because you are disabled or have no prospect of earning money you may be able to get the loans discharged.
There are specific rules to have your taxes discharged;
- Your tax debt must be at least three years old
- The return was filed at least two years before you filed bankruptcy
- The assessment is over 240 days old,
- You must not be guilty of tax fraud or tax evasion.
If all these things are true, then you may be able to get your taxes eliminated in bankruptcy.
Child Support and Alimony
You will not be allowed to discharge these payments in bankruptcy. The automatic stay also will not apply to child support or alimony payments. You must continue to make these payments during and after your bankruptcy case.
Even if you are unable to eliminate some of your debt in bankruptcy, the money you free up from your unsecured credit card, medical bills, and loans being discharged will make it easier to make these payments. Contact a Dallas bankruptcy attorney to find out what part or all of your debt can be eliminated with bankruptcy.