Monday, August 14, 2017

How To Eliminate Debts Through Bankruptcy

For people who have more debt than they can manage, solutions are available. The type of solution you decide is best for you will depend on your needs, and also on your overall financial picture. Sometimes overwhelming debt can be alleviated by refinancing your house, modifying your mortgage, or eliminating overspending. But in many cases the answer to financial relief is found by filing bankruptcy, which is a legal way of getting rid of or reducing your debts.

Eliminating debts through bankruptcy is accomplished as follows:

         Filing a case that sets for everything you owe, and to whom the debts are owed.
         Appearing at the 341 meeting, which takes place shortly after your case is filed, and answering a few questions about what led you to need to file bankruptcy.
         Advising your lenders if you are going to return the collateral that secured their loans, or are going to keep paying for the property by reaffirming the debt.
         If you file a Chapter 13, you will be required to make the Chapter 13 Plan payments for the duration of your case (which is usually 5 years). Once your Plan payments are complete, you will receive a discharge of debts.
         If you file a Chapter 7 you will receive a discharge of debts approximately 4 to 6 months after your case is filed.
The discharge is how debts are eliminated through bankruptcy. An entry of discharge means all the debts in your case are no longer due, unless you agreed to reaffirm a debt. A reaffirmed debt remains due even after the bankruptcy case is over and if you fail to pay on a reaffirmed debt the lender can collect. Debts are also eliminated through bankruptcy by repayment during the bankruptcy case itself. This happens most frequently in a Chapter 13, where you propose a plan of repayment and then make monthly payments to the Chapter 13 Trustee. The Chapter 13 Trustee will accept your monthly plan payment and divided it among your creditors, according to the terms of the Plan. Once all of the payments have been made, over the life of the case, and distributed to creditors, the debts are no longer due. There are some exceptions to this rule, as in the case of an ongoing debt that extends beyond the length of the Plan. If you have any of those types of debts in your Chapter 13, you will continue with payments on your own after the case is over. The ins and outs of bankruptcy can be hard to understand, but with our help you will see them clearly.

If you have more questions about bankruptcy, contact us at We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.

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