Bankruptcy is designed to give debtors a fresh start to reorganize their debts or eliminate debts in order to rebuild after a financial crisis. In order to be able to recover and begin to rebuild, the debtor must be able to wipe out as many types of debt as possible or the bankruptcy will be of very little help. Therefore, congress designed bankruptcy to eliminate many types of debt to give the debtor the best chance possible of turning around a poor financial situation. While not all types of debt are dischargeable through a bankruptcy case, debtors are able to eliminate most, if not all, of their debts through a bankruptcy filing.
Common Types of Debt Discharged in Bankruptcy
Bankruptcy wipes out most types of debt with the exception of most taxes, student loans, alimony child support and a few other rare types of debt. If you have concerns that bankruptcy will not cover a specific debt, you should discuss this with a qualified, experienced bankruptcy attorney. Because there is a great deal of misinformation about bankruptcy available online and by word-of-mouth, your concern may be unfounded because you may be able to eliminate that debt but you will not know for sure until you speak with a bankruptcy attorney.
Common types of debts that are subject to a bankruptcy discharge include:
- Credit Card Debt – Credit cards are the second leading source of debt in America (student loans have replaced credit cards as the number one type of debt). It is very easy to get into trouble using credit cards and very difficult to get out of trouble by paying the minimum monthly payment. Filing bankruptcy wipes out credit card debt so you can concentrate on other debts that may not be discharged.
- Medical Expenses – Even if you have health insurance, a medical emergency may leave you owing thousands or hundreds of thousands in medical bills. You can include these in your bankruptcy to discharge your personal liability for these debts.
- Personal Loans – Even though you may use property you already own to secure a personal loan, your bankruptcy attorney can explain how you can keep that property while erasing the personal loan debt.
- Payday Loans – Cash advance companies prey on individuals who need money for an emergency had have no other alternative but to take out a loan at an unreasonable interest rate. Even if you issued a post-dated check, you can include this in your bankruptcy without fearing criminal charges for writing a bad check.
- Judgments and Wage Garnishments – In most cases, judgments and wage garnishments will cease when you file bankruptcy. If the underlying debt is dischargeable through bankruptcy, you will no longer be responsible for the judgment or wage garnishment.
To discuss all of the various types of debts you can discharge through bankruptcy, contact our office to schedule a free bankruptcy consultation.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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