Will Bankruptcy Clear ALL my Debts?
If you live in New York and are thinking of declaring bankruptcy to get rid of all your debts, be aware that there are some debts that bankruptcy won’t touch.
What Is a Bankruptcy Discharge?
Declaring bankruptcy, whether it is Chapters 7, 11, or 13, is a long and complex process that is usually made less painful with the right bankruptcy attorney by your side. And, at the end of the process is the Discharge.
For Chapter 7, this comes about four months after the start of the process. For Chapter 11 and 13, the discharge happens after you complete all the payments of your repayment plan – about three to five years. For Chapter 11 there is potentially a more flexible standard for the plan which could be longer than 5 years and is generally under 10 years.
During a bankruptcy discharge, the court will release you from having to pay back certain debts. Your creditors will be prevented from any further legal action, including contacting you in any way.
But not every debt is covered under bankruptcy protection.
Debts That Can Be Discharged
Bankruptcy takes care of what is considered unsecured debt, meaning that there is no collateral or liens involved. These types of debt include:
- credit card debt
- utility bills
- medical debt
- rental leases
- back rent
- personal loans
There are some secured debts that can also be discharged, such as your house or your car. However, since there are liens on these, you will lose the assets in the discharge.
Debts That Can’t Be Discharged
The following types of debt are not taken into account during bankruptcy proceedings:
- student loans
- child support and/or alimony
- certain unpaid taxes
- certain legal judgements
The court can also deny a discharge if it feels like you falsified any part of your bankruptcy information. For a master list, click here – https://www.law.cornell.edu/uscode/text/11/727
Can the Discharge Be Challenged?
Just because you’ve declared bankruptcy doesn’t mean your creditors won’t go down with out a fight. Once a bankruptcy proceeding starts, your creditors are given a deadline to come back with any reasons why the debt should not be discharged. Most objections are based on missing paperwork or allegations of fraud – which is another reason that having an experienced bankruptcy lawyer by your side is so important. Your bankruptcy lawyer can make sure all the proper paperwork gets to the right people at the right time. And if a creditor insists on bringing their denial to court, your bankruptcy lawyer will be fighting by your side.
What to Do Next
Since there are so many variables, the best option you have is to contact an experienced bankruptcy lawyer to get advice on your particular situation. Reach out to New York bankruptcy attorney Ronald D. Weiss, P.C. for a free consultation. He can tell you what you need to know about the bankruptcy process, and help you get your case started. Call 631-271-3737 and take the first step to a fresh start.
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