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Does Debt Go Away After Filing For Bankruptcy?

Does Debt Go Away After Filing For Bankruptcy?

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Wed, Nov 30, 22, 16:16, 2 Yaers ago
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Does Debt Go Away After Filing For Bankruptcy?

Whether you're filing for bankruptcy for the first time or you're a seasoned veteran, you may have questions about whether debt goes away after filing for bankruptcy. This article discusses what happens to your debts after you file, and what you can do to protect yourself. Remember, it is best to see professional help. In Harrisburg, PA, a bankruptcy attorney can help you know your rights and assist you with the correct steps to filing your bankruptcy and to assess if the debt really does go away. 

Chapter 7 bankruptcy wipes out mortgages, car loans, and other secured debts 

Using the Chapter 7 bankruptcy method, you can erase your debts in as little as four months. But there are several key points you must consider before you file for this type of bankruptcy. 

For example, you may be surprised to learn that most unsecured debts can be fully discharged. This includes credit cards and loans that you've received for personal use. You'll also want to make sure you keep your mortgage loan current. If you're not, you could find yourself facing repossession or foreclosure. 

Also, the Chapter 7 bankruptcy method can be useful if you're having trouble making your mortgage payments. It's possible to restructure your loan and catch up with your payments. In some cases, the lender may even be willing to extend your loan. 

Chapter 13 bankruptcy is for low-income filers 

Getting out of debt is the ultimate goal of filing for Chapter 13 bankruptcy. However, many black filers in Memphis fail to complete the process. The average time for completion is five years, and most bankruptcy filers do not last that long. 

Black debtors file for Chapter 13 bankruptcy for a variety of reasons. They may file for bankruptcy protection to avoid a car seizure, to avoid license suspension, or to keep their car for job interviews. They may also file if they have no regular income. 

Applicants must also meet the "means test." They must earn less than the median income in the state for the size of their family. They must also be a sole proprietor or be the owner of a business. 

Exempt assets from liquidation 

Having to liquidate assets is the last thing anyone wants to do after filing for bankruptcy, but it is possible to exempt certain assets from liquidation. In order to qualify for an exemption, a debtor must meet certain criteria. 

There are several different types of assets that can be exempted from liquidation, and each state has its own set of rules. 

First, there is the homestead exemption. This allows you to keep your house if you qualify. You must make payments to avoid foreclosure, though.

You may also qualify for a car exemption. In some states, you can keep your car if it is worth less than $4,550. If your car is worth more, you will still need to make payments to avoid foreclosure. 

You can also qualify for an exemption by taking advantage of a credit card debt modification. This type of bankruptcy allows you to extend your debt and pay it back over a period of 36-60 months. 

Reaffirmation agreements 

Using a reaffirmation agreement after filing for bankruptcy can help you retain your property and avoid repossession. But, there are several things to know before you sign a reaffirmation agreement. If you misrepresent your situation in your contract, you could find yourself in legal trouble. 

The reaffirmation agreement is a binding contract between you and your lender that states that you will pay back your debts. It also promises not to foreclose on your property. In the event that you fall behind on payments, you can lose your property. To prevent this, you must make sure that you read the terms of your reaffirmation agreement carefully. 

The reaffirmation agreement will be reviewed by the bankruptcy judge. This judge will decide if the agreement is in the best interest of the debtor. If the judge finds that the agreement imposes an "undue hardship" on the debtor, the agreement will not be approved. 

Child support and alimony obligations survive bankruptcy 

Despite the fact that bankruptcy can wipe out debt, it cannot erase the obligation to pay child support or alimony. This is because these obligations are classified as priority debt. Unless you can pay them off before your bankruptcy, they will be included in your bankruptcy case. 

If you file for bankruptcy, you may be able to stop garnishments of wages or bank accounts. You may also be able to stop foreclosures on your real estate. But it's important to understand that these are not the only benefits of filing. 

For instance, filing bankruptcy may allow you to free up some of your income to make child support payments. However, you still must make these payments as they come due. 

The Bankruptcy Code also offers a guideline formula for calculating child support. The calculations should be based on gross income. You should take into account the tax effects of child support.

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