If you are exploring how bankruptcy can get you out of debt, you may feel overwhelmed by the process and confused about what some of the terms mean. Understandably so, bankruptcy is a complex area of federal law. At our law firm, we strive to ensure our clients understand the bankruptcy process, what to expect, and how filing for bankruptcy will help them get out of debt.

We’ve been practicing exclusively in bankruptcy law for over 35 years. Come meet with us for a free consultation to explore if bankruptcy is the right debt relief solution for you. In the meantime, read on to learn about a few of the most complex bankruptcy concepts!

Nondischargeable Debt

The goal of filing for bankruptcy is to erase debt. It is important to understand that not all debt can be erased through bankruptcy.

“Nondischargeable Debt” is debt that cannot be erased in bankruptcy. Even after a successful bankruptcy, you will still be legally obligated to pay these debts back. The most common debts that are nondischargeable include:

  • Spousal or child support payments
  • Fines imposed from a government body
  • Debts resulting from illegal activity
  • Some tax debts, including newer tax debts
  • Student Loans

The foregoing list is not exhaustive. Due to either the type of debt you owe or when or how it was incurred, you may have other debts that are also nondischargeable.

On the other hand, “Dischargeable Debt” is debt that can be erased in bankruptcy. Credit card debts and medical debts are nondischargeable, as well as certain other debts. Dischargeable debts may be totally erased through bankruptcy.

Secured Debt

“Secured Debt” is a debt backed by collateral. The debt itself is secured by something of value. For example, home mortgages are secured debts backed by the property and car loans are backed by the vehicle. If you default on payments on a secured debt, the creditor can seize the collateral to help satisfy the debt.

“Unsecured Debt” is debt that is not backed by a collateral, such as credit card debt. If you default on payments on an unsecured debt, in general, the creditor must bring a lawsuit against you before it can take collection action.

Secured debts are treated differently than unsecured debts in bankruptcy. Personal liability on secured debt is erased in bankruptcy, but the liability remains attached to the collateral. What this means to you on a practical level is that if you intend to keep the collateral, like your car or house, a secured debt is attached to, then you must pay back the debt after bankruptcy.

Bankruptcy Estate

When a bankruptcy case is filed it creates what is known as a “bankruptcy estate,” which is the debtor’s interest in his or her property at the time of filing for bankruptcy. The Bankruptcy Trustee assigned to administer the case is in control of the estate.

So long as all assets are listed and exempt in the bankruptcy petition, there is no risk of assets being seized and sold. Further, as long as you disclose all of your assets prior to filing and properly value them, you will know if you have assets that cannot be protected through bankruptcy. The fact is most people who file for bankruptcy get to keep all or most of their belongings, assets, and property – everything that makes up their bankruptcy estate.

We Can Help You Erase Your Debts

We help hundreds of people just like you successfully file for bankruptcy each year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

 

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The Law Office of Barbara B. Braziel proudly serves the people of Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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