Are you being sued by a creditor or harassed by a debt collector? Are you facing a foreclosure or a repossession? Is a wage garnishment making it impossible for you to pay your living expenses? If you answered yes to any of these questions, bankruptcy may provide the debt relief you need in order to recover from a financial crisis. Bankruptcy filings make it possible for individuals to rebuild their credit and their lives by erasing their debts and giving them a fresh start. However, bankruptcy does not erase all debts. Some debtors may be required to pay back creditors.
I Thought Filing Bankruptcy Meant I Would Not Pay Back Creditors
Bankruptcy does erase most debts. For some debtors, bankruptcy erases all debts and they are not required to pay back creditors. However, there are some debts that bankruptcy does not erase and, in those cases, people must pay back creditors. For example, alimony and child support are non-dischargeable debts in bankruptcy. If you owe alimony and child support, you must pay those debts even though you file bankruptcy. Most student loans and taxes are also non-dischargeable; therefore, you must pay back creditors who have these types of debts.
On the other hand, your bankruptcy will discharge credit card debt, medical bills, personal loans and payday loans so you will not pay back creditors who are owed these types of debt. Bankruptcy will also discharge your legal liability to repay secured debts such as mortgages and car loans but the bankruptcy will not remove the lien on the collateral. If you want to keep your house and your car, you must pay back creditors who have liens on those items. Depending on the type of debt you owe, you may be able to discharge all of your debts except for the secured debts on property you want to keep.
For some debtors, they may be required to pay back creditors if their income exceeds the income allowed in a Chapter 7 case. Debtors, who file a Chapter 13 bankruptcy, pay back creditors through their Chapter 13 bankruptcy plan. Depending on the case, the debtor may only pay back creditors a small percentage on unsecured debts. The debtor may also be able to pay back creditors with secured loans through the plan to decrease the interest rate and monthly payment for the secured loan (this does not apply to mortgage loans).
Whether you are required to pay back creditors will depend on your specific financial situation and the types of debt you owe. Consulting with an experienced bankruptcy attorney is your first step in resolving your debts problems. Contact our office for a free bankruptcy consultation to learn how filing bankruptcy can give you much-needed relief from your debt problems.
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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