If you are facing financial difficulties it is essential to know what happens and what doesn’t happen in bankruptcy before deciding to file for a bankruptcy case. There is no doubt that if you’re experiencing severe debt problems filing for bankruptcy can be a very powerful remedy. Many people don’t know what bankruptcy can handle and what it doesn’t. Depending if you file a Chapter 7 or Chapter 13 will depend on what bankruptcy can and cannot do for you.
Continue reading for an informational overview about what bankruptcy cannot do for you if you are considering filing.
Things Bankruptcy Can’t Do
Bankruptcy is a great tool to use in helping solidify that there are some things that bankruptcy cannot cure. Here is what it can’t do for you.
Bankruptcy doesn’t prevent a secured creditor from foreclosing our reprocessing property you can’t afford.
A bankruptcy discharge does eliminate debts but it doesn’t eliminate liens. A lien allows the lender to take the property, sell it at auction, and applied the proceeds to a loan balance. While bankruptcy can eliminate your obligation to pay the debt, assuming you have secured debt, it will not take the lien off your property. In Chapter 7 you can wipe out a home mortgage but the lender’s lien will remain on the home. As long as the mortgage remains unpaid the lender can’t exercise its lien rights to foreclose on the house once the automatic stay lifts.
Bankruptcy doesn’t eliminate child support and alimony obligations.
Child support and alimony obligations survive no matter which chapter of bankruptcy you file. You will have to continue to owe the stats in full just as if you have never filed for bankruptcy. If you use Chapter 13 will have to pay these debts in full through your plan.
Bankruptcy does eliminate student loans except in limited circumstances.
If you’re hoping that you can get your student loans discharged in bankruptcy then you are going to be in for a surprise. Student loans can only be discharged in bankruptcy if you show that repainting the loan would cause you undue hardship. You must prove that you can’t afford to pay her loans currently and that there is very little likelihood you can do so in the future. For many people, this doesn’t happen and you will need to pay your student loans.
While there aren’t many things bankruptcy can do there are many things that simply can’t. Before you file for bankruptcy is important that you know what to expect. This is why we suggest reaching out to bankruptcy attorney like our friends at The Law Offices of Ronald I. Chorches, for a better understanding of what you can expect if you decide to file for bankruptcy.