Bankruptcy is a viable lifeline for those who are immersing in debt. Consumers often file petitions for releasing them from debt. And fortunately, in most cases, the petition is granted. But the real concern is that whether filing bankruptcy can relieve the situation.
Bankruptcy refers to a court proceeding where the jury and the court trustee will examine the situation, concerning the assets along with the liabilities of people and partnerships with a debt that have become too overwhelming to be repaid.
Thankfully, bankruptcy laws were drafted to offer a second opportunity to people so that they can start over once again after facing a complete collapse of funds. No matter whether the bankruptcy and debt are results of poor decisions or misfortune, lawmakers can consider it a second chance which is vital for a fallback in this capitalist economy. If you are still hesitant about this option being able to eliminate debt then you can consider giving yourself a second chance.
Can bankruptcy eliminate debt?
Well, bankruptcy may not be able to eliminate all of the debt. For instance, non-dischargeable debts are so essential that they might not be discharged when you file bankruptcy. When all your debts are falling into this category, it may not be suitable for you to plea for bankruptcy.
These may include domestic financial support such as funds for children and alimony, debts incurred from false pretenses or fraud, priority tax debts. Other non-dischargeable debts include obligations stemming from personal injury caused by bad decisions like drunk driving. It may not be suited for student loans also unless you are able to prove that the undue hardship exception is applicable in your case.
In some cases, filing for Chapter 13 bankruptcy can offer an affordable means of reorganizing and repaying non-dischargeable debts by following a repayment plan of 3 to 5 years. There is a maximum debt cap with respect to Chapter 13 bankruptcy.
When to consider filing for bankruptcy?
Before you file for bankruptcy, it's important to educate yourself on how it works. It comprises a thorough process that all businesses and individuals should be ready to follow. When you are facing severe debt issues, filing for bankruptcy can be a strong way of remedying the situation.
This is because it can stop most of the fund-collecting actions such as wage garnishment, telephone calls, and even lawsuits in some cases. It can rule out enough of your debt including medical bills, credit card balance, personal loans, and a lot more.
Bankruptcy allows people in debt to wipe off certain monetary obligations and think of a fresh start. The two primary variants of bankruptcy lawsuits, Chapter 13 and Chapter 7 offer their own share of benefits in debt management. Even though it may not be able to relieve you from all kinds of debt, when you have a reputed and knowledgeable lawyer by your side, he can prevent a creditor from repossessing the property that cannot afford any more along with tax debts and debt stemming from fraud cases. This means, if you are in such a merciless situation, it's imperative to have a lawyer help you through the process.
Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.