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If you are considering different types of options for debt relief, you might want to evaluate bankruptcy. Bankruptcy can provide you with a lot of relief from your debt issues, but it probably will not eliminate every debt you have. Here are several things to know about bankruptcy and the way it handles debt elimination.
Discharge occurs more frequently with Chapter 7 cases
When you file for bankruptcy, one of the first steps you must take is determining which type to use, and there are two main types. The first type is Chapter 7, and you can only use this if your income is less than a certain amount. If your income is higher than the amount listed for your state, then you could use Chapter 13.
Chapter 7 cases typically result in a discharge of more debt than Chapter 13 cases, though, and this is important to know. A discharge refers to forgiving debt and wiping it away, and this is the debt elimination that is achieved through any bankruptcy case. You can receive a discharge of debt through Chapter 13 too, but it is far less likely that you will.
Discharge of debt only occurs with certain debts
The second thing to understand is that not all debts can be discharged through a bankruptcy case. If you owe money for debts that are not qualifying debts, they will not be discharged even if you file for bankruptcy. Bankruptcy will only allow forgiveness of debts that fall into a certain category, and this category is called qualifying debts. This includes debts you owe for medical bills, personal loans, and credit cards, but it would not include money owed for court-order debts, such as alimony. A lawyer can look over your debts and tell you which ones qualify and which do not.
You must meet certain conditions to have all your debt eliminated
Finally, in order to have every debt you owe eliminated through bankruptcy, you must meet the following two conditions:
If you meet these conditions, then bankruptcy would eliminate all your debts. If you have questions about your case, talk to a bankruptcy lawyer today. This is a great way to get an evaluation about your personal situation, as this would help you learn if bankruptcy is a good option for you.
Contact a law office, like Martinez Law Firm, to learn more.
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