Bankruptcy can be a highly effective financial tool for those who are drowning in debt and need a clean slate. However, a bankruptcy lawyer will tell you that it cannot erase all of your mistakes. If you are considering filing for personal bankruptcy and have questions, The Law Offices of George Mitris in Victor, NY, is happy to answer them. They’re here today with a closer look at bankruptcy’s limitations.
What Bankruptcy Can Do For You
Eliminate Unsecured Debt
If you have racked up more credit card debt than you can reasonably pay off, bankruptcy will help you eliminate it. Other kinds of unsecured debt include medical bills and personal loans. Chapter 7 bankruptcy eliminates unsecured debt entirely, while Chapter 13 bankruptcy reorganizes it to make a more manageable payment plan.
Save Certain Assets
Individuals who file for bankruptcy can keep certain exempt property. For example, Chapter 13 bankruptcy may prevent foreclosure on a mortgaged home.
Enact An Automatic Stay
If you are tired of creditors harassing you, bankruptcy will put a stop to the phone calls, letters, foreclosure actions, and repossession attempts.
What Bankruptcy Cannot Do
Eliminate Tax Debt
In some rare cases, it’s possible to erase a portion of your state or federal income tax by filing for Chapter 13 bankruptcy. However, in general, bankruptcy does not eliminate tax debt.
Erase Student Loans
Unless you have suffered a permanent disability and repaying your student loans would cause extreme hardship, you will not be able to erase student debt by filing for bankruptcy.
Eliminate Support Payments
Child support and spousal support payments cannot be eliminated through bankruptcy, even with the help of a skilled bankruptcy lawyer.
If you are drowning in debt and can’t seem to get ahead, The Law Offices of George Mitris will help you determine if you are eligible for bankruptcy. To learn more about your debt relief options, visit their website. Call (585) 225-7830 to schedule an initial consultation with a bankruptcy lawyer today, and connect the firm on Facebook.