The bankruptcy laws were enacted to help debtors get a fresh start, to provide ways for getting out from under unmanageable debts. But a bankruptcy filing won’t resolve all financial issues. Here are some of the things you can expect to accomplish with a bankruptcy filing, as well as some of the outcomes that you won’t be able to achieve.
How Bankruptcy Can Help You
One of the most important benefits of a bankruptcy filing is the automatic stay, which goes into effect immediately upon your filing of a bankruptcy petition. The stay prevents creditors from taking any action outside of the bankruptcy proceeding to collect the debt. The stay can be lifted, though, if you engage in fraud or violate bankruptcy rules, or for a mortgage holder, car lender or other secured creditor to proceed against your property given as collateral.
With a bankruptcy filing, you can discharge unsecured debt, such as credit card debt and medical bills. This includes debts that have been turned over to collection agency. It also includes personal loans, utility bills, money owed under a residential lease, most attorney fees, Social Security overpayments and civil court judgments. A bankruptcy filing can also help you get rid of certain types of liens.
What Bankruptcy Won’t Do For You
In most instances, bankruptcy affects only the debt and not the lien. Accordingly, if you have secured property, such as a motor vehicle, a bankruptcy won’t necessarily prevent the creditor from repossessing your car unless you follow certain procedures to remain legally liable after bankruptcy.
There are also specific debts which cannot be discharged in a bankruptcy:
- Child support and alimony arrearages cannot be eliminated in bankruptcy
- With few exceptions, in cases of extreme hardship, student loans are not dischargeable
- Most tax debts are not dischargeable.
- Obligations of parents, relatives or others who have co-signed the debt papers.
- Obligations of businesses or others who have not filed bankruptcy.
Contact Neuner & Ventura, LLP
At Neuner & Ventura, LLP, weprovide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
Representing Clients across South Jersey