Bankruptcy Questions
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What Debt Can I Discharge
DISCHARGING YOUR DEBT THROUGH BANKRUPTCY
If you have excessive debt that you cannot pay, filing for protection under the Bankruptcy Act is an orderly way to terminate many of your debt obligations.
Most individuals will file under Chapter 7 or Chapter 13, depending upon the individual financial situation in West Palm Beach.
The Bankruptcy Act includes the requirement of what is called the "means test." This test determines whether your disposable income is sufficient to repay your debt under a payment plan. If not, you are eligible to file under Chapter 7, which will discharge most of your unsecured debt.
There is no repayment plan under Chapter 7. Any assets you have will be liquidated to repay your creditors. You are allowed to retain certain assets.
Discharging the debt under Chapter 7 usually takes place 60 days following the meeting of creditors, called a "321 meeting."
This time period allows creditors to file objections to the discharge of your debt. In a large number of cases, no creditors appear at this meeting, and no barriers are presented to discharging your debt.
Once the discharge is filed, the creditors are permanently prohibited from further collection activities.
Filing under Chapter 13 is a restructuring of your debt which is the process when there is sufficient regular income to cover normal living expenses, as well as payments in a repayment plan that lasts for 3 – 5 years.
Payments are made to a Trustee who distributes the money to your creditors.
After the payments are completed, your debt is discharged by Court Order. That will terminate your obligation with those creditors.
The Court requires that the debtor undergo a course in financial management before the discharge will be granted under the Bankruptcy Act.
WILL BANKRUPTCY DISCHARGE ALL OF MY DEBT?
A valid lien in place on property will not be included in the discharge of debt. Certain taxes cannot be discharged, particularly in recent years.
If you have an old tax debt of high value, you may qualify to have it discharged, and to finally be free from that burden.
Other debts that cannot be discharged include alimony and child support, government funded educational loans (except in certain cases), death or personal injury awards as a result of driving while intoxicated or under the influence of drugs and criminal fines, etc. There are other exceptions.
Bankruptcy can give you your life back, but it is a complex process and it is very beneficial to have the experience of a skilled, dedicated West Palm Beach bankruptcy attorney to guide you.
If you are considering filing for bankruptcy, you want to ensure that you gain the greatest possible benefit and that you are able to discharge the maximum possible debt. My firm is dedicated to helping you successfully complete this process.
Call my West Palm Beach Bankruptcy firm today at 561.689.1512 to set a no charge initial appointment so that I can assess your particular case.
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