I talk to people all the time who have unrealistic ideas about filing for bankruptcy. Most of them have picked up misinformation and myths about bankruptcy, which is already a confusing process. For some, but not all, bankruptcy is the solution they have been seeking – they just don’t know it yet. So, it’s time for some straight talk about what bankruptcy can and cannot do for you.
General Information About Bankruptcy
When people and companies are overwhelmed by debt, bankruptcy may help. Most people can choose from the most common types of bankruptcy:
- Chapter 7 – often referred to as “liquidation” because at least some of your assets may be sold to pay your approved creditors.
- Chapter 11 – typically used to reorganize a business or corporation but rarely used for individuals.
- Chapter 13 – allows most debtors to set up a monthly repayment plan that pays some of your debts.
There are several other types. However, when most individuals talk about bankruptcy, they mean Chapter 7 or Chapter 13.
What Bankruptcy Can Do for You
You may be drowning in debt and looking for a way out. Learning more about bankruptcy can help you find your way. For example, here’s what you might be able to accomplish by filing for bankruptcy:
- Eliminate much of your unsecured debt, like credit card debt, personal loans, and medical debt.
- Stop most collection efforts because an automatic stay goes into effect as soon as you file.
- Keep some of your assets, including your house and cars.
- Stop foreclosure action, typically with a Chapter 13 filing.
- Reduce your secured debt, especially when you owe more on property than its actual value.
As we learn more about bankruptcy, you can see where it can help. However, it is also important to understand what relief might not be available.
What Bankruptcy Cannot Do
Limitations and restrictions vary based on the type of bankruptcy and your individual circumstances. We can talk about bankruptcy in greater detail during our personal consultation. Generally, though, it might be difficult or impossible to accomplish the following goals:
- Eliminating tax debt. Usually, you cannot get rid of your state or federal income tax debts with a Chapter 7. However, it is sometimes possible with a Chapter 13.
- Removing spousal support or child support. In fact, debtors have to account for back payments in their repayment plan.
- Discharging student loans. Unless you are disabled or can prove repayment is a hardship, you usually cannot eliminate student loan debt.
- Getting rid of all other debts. With a Chapter 13, you may reduce or discharge some debts. However, you will be paying some of your creditors through your repayment plan.
Even considering some of the limitations you’ve learned about bankruptcy, it could still be your best way to get some relief from a stressful situation.
Learn More About Bankruptcy and the Relief You Can Get by Filing
Bankruptcy may not offer all the solutions you want. However, any relief is better than no relief. We can review your individual circumstances to file a plan that gives you the most help possible.
Attorney Leslie Craft has the experience you need to deal with bankruptcy and traffic violations. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives. Consultations are free and only take about 30 – 45 minutes of your time. Your options may surprise and even excite you!
To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or fill out our simple contact form. Bankruptcy Doesn’t Have to be a Painful Process! My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.