The bankruptcy process can seem particularly daunting to borrowers who have no idea about what it entails or what the outcomes of a bankruptcy case will be. While there are a lot of misconceptions about bankruptcy (italicized below), here are the facts that debtors should consider as they decide or prepare to file for bankruptcy.
I will lose my house and my car if I file for bankruptcy.
In many cases, debtors filing for bankruptcy are able to keep their house and/or their car, as U.S. bankruptcy law allows for certain exemptions (meaning that specific assets, including a home and a vehicle, can be excluded from a bankruptcy estate as long as they fall within the specifically defined equity values). In other words, individuals who are in serious debt may be able to keep their car and home while relieving themselves of overwhelming debt by filing for bankruptcy.
I will be debt-free after bankruptcy.
While this may be true for people who only have certain, unsecured debts – like credit card or medical bill debts, in many cases, debtors filing for bankruptcy are also burdened with student loans, which will not be discharged by bankruptcy proceedings. Additionally, if individuals filing for bankruptcy have debts related to taxes or court-ordered payments (like spousal support, child support or restitution for criminal convictions), these debts will also likewise not be discharged by bankruptcy. However, it’s important to note that, because other unsecured debts will be discharged by bankruptcy, debtors filing for bankruptcy may be able to free up much-needed funds to pay down non-discharged debts.
I can file for bankruptcy as many times as I need to.
U.S. bankruptcy law dictates that individuals will not be eligible for discharge of their debts under Chapter 7 bankruptcy if they have successfully filed this type of bankruptcy within the past 8 years. Similarly, U.S. bankruptcy law does not permit debtors to file for Chapter 13 bankruptcy if they have successfully done so within the past 2 years (or if they have filed for Chapter 7 or 11 bankruptcy within the past 4 years).
If you are facing seemingly insurmountable debt and are looking for a financial fresh start, contact the trusted Colorado debt relief and bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C. Our experienced legal professionals are committed to providing each of our Clients with the debt relief assistance they need, and we will work tirelessly to ensure that our Clients’ cases are resolved as favorably and efficiently as possible. For a thorough assessment of your situation, along with expert advice regarding the best manner in which to move forward to unburden yourself from debt, call us at (866) 916-3950.