It’s natural to feel hopeless when facing a considerable amount of debt, especially if you can barely make the minimum payments. With the right financial strategy, though, it may be possible to regain your footing. Depending on the circumstances, that strategy may include declaring bankruptcy. If you’re considering filing for Chapter 7 or Chapter 13, here’s what you should know before getting started.

Not All Debts Are Dischargeable

If much of your financial trouble stems from medical bills, credit card debt, personal loans, lease agreements, and/or promissory notes, declaring bankruptcy can provide a clean slate. If, on the other hand, you are behind on child support, alimony, student loans, tax obligations, or criminal restitution, filing bankruptcy is unlikely to help. In most scenarios, such debts are not dischargeable.

It’s Possible to Commit Fraud Inadvertently

Bankruptcy fraud is a serious offense. Unfortunately, it’s fairly easy to commit it inadvertently if you’re unfamiliar with the laws. For example, something as simple as selling your possessions—which is a reasonable thing to do if you’re in financial trouble—could be considered fraud. Selling or transferring assets just before filing could result in a denial of your petition—and, depending on the circumstances, criminal penalties.

Failing to disclose certain information to the court could also be considered fraud. The court wants to know virtually everything, including any gifts or contributions you have recently given to others and any storage units or safety deposit boxes you maintain.

To learn more about discharging debt through bankruptcy, get in touch with Pearce Law Firm. With offices in Foley, Bay Minette, and Atmore, AL, this firm is comprised of compassionate professionals who never judge their clients for the situations they find themselves in. Instead, they aim to help those in financial trouble obtain a fresh start. Led by attorney Allyson Pearce, who has over 15 years of experience in the legal field, they pride themselves on providing a hassle-free experience. To learn more about filing for Chapter 7 or Chapter 13 bankruptcy with their help, visit their website. To request an initial consultation, call (251) 301-8250.