If it feels like you’re drowning in debt, you may be considering declaring bankruptcy. Although filing can be a viable strategy for regaining your financial footing, it has certain limitations. Whether it’s the best approach for your particular situation will depend on a variety of factors, including the kinds of debt you owe and the types of assets you have. Here, the knowledgeable team at Kratovil Law Offices, PLLC in Charles Town, WV, explains what filing can and cannot do for those who are considering bankruptcy. 

How Bankruptcy Can Help

The main reason people declare bankruptcy is to eliminate unsecured debt. This might include medical debt, personal loans, and credit card debt. Depending on the circumstances and each creditor’s willingness to negotiate, debtors may also be able to reduce their secured debt during bankruptcy proceedings.

Additionally, filing will enact an automatic stay, which means most lenders can no longer harass you for payment or take action against you. This includes pending foreclosures, evictions, and repossessions, which will be halted, at least temporarily, until the case is resolved. 

What Bankruptcy Cannot Do 

If a lot of your debt is comprised of alimony obligations, child support, student loans, criminal fines, and/or tax burdens, bankruptcy may not be very helpful. In most circumstances, these kinds of debts are not dischargeable.

Additionally, filing will only provide a clean slate for the moment. If you continue spending more than you make, even after discharging applicable debts, you will likely end up in the same dire position a few years down the road. At the end of the day, bankruptcy cannot provide a permanent solution to financial struggles. 

If it seems like your situation warrants bankruptcy, despite its limitations, turn to Kratovil Law Offices, PLLC. Based in Charles Town, WV, this practice is led by a seasoned lawyer who has more than 30 years of experience helping clients resolve complicated legal issues. In addition to bankruptcy proceedings, his areas of expertise include criminal defense, personal injury law, real estate transactions, and business law. Visit the firm online to learn more about the services they provide, or call (304) 728-7718 to schedule your free consultation.