Bankruptcy and Debt Elimination

: Chris Lee Law Firm

  Filed under: Debt

debt elimination

When you file bankruptcy, most debts can be eliminated. Unsecured debts are usually eligible for discharge, credit cards, medical debt, utilities, payday loans, some taxes, and other loans that do not have collateral attached to them.

Exemptions

Every state allows you to keep certain assets; these are considered “exempt” in bankruptcy. Some states allow you to keep your home, no matter what the value. Other states allow a certain amount of your home to be exempt from bankruptcy. Retirement accounts, household furnishings, clothing, and tools of your trade are exempt in most states.

Debts that cannot be eliminated in bankruptcy are current taxes, alimony, child support, court-ordered damages, and some student loans. If you wish to keep your home or your vehicle, you will need to continue to pay your mortgage and car loans. If you have the money available, you can pay what your asset is currently worth instead of the total from the original loan and have the rest discharged in bankruptcy.

Chapter 13

If you are behind in your house payment and about to lose your home to foreclosure, you can file Chapter 13 bankruptcy and take three to five years on a court-approved payment plan to catch up on your arrears. At the end of that time, all of your remaining eligible debt will be eliminated.

Any debt remaining after filing bankruptcy will be easier to pay since you were able to eliminate most of your unsecured debt. Most Americans have credit card debt as their most substantial monthly bill next to their home payments, having that eliminated will allow you to pay on your remaining debt and improve your financial well being.

Contact a Plano bankruptcy attorney today to find out how you can get financial relief.


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