Bankruptcy Attorney Memphis
Making the decision to file for bankruptcy can be a tough one, and is not likely something a person has concluded without evaluating all of their other options. Those who have accumulated a large amount of debt and are unable to pay into it monthly, may want to speak with an attorney about what to do next. Depending on the ratio of how much you earn and your debts, it may be in your best interest to declare bankruptcy. Here in the article, we have answered several common questions people ask an attorney when weighing the pros and cons of this decision:
What is the definition of a discharge?
As related to bankruptcy, discharge means you no longer have the responsibility to pay off a debt, and the creditor cannot pursue payment from you. However, if you co-signed with someone else for a loan, that person’s obligation does not get erased. If you are considering filing for bankruptcy, you may want to have a conversation with the person who co-signed the loan with you.
Do all debts get discharged after applying for bankruptcy?
Not all debts will be eradicated after declaring bankruptcy. Many people view bankruptcy as the way to get rid of all their debts, but there may be certain debts that are not able to be erased. If you incurred debts due to fraud or willful actions, these are unlikely to be erased. Examples of other non-dischargeable debts include:
- Restitution that was accrued as part of a criminal sentencing
- Student loans for college or other continued education
- Fines due to a government agency (city or state)
- Debts to creditors that were not listed on your bankruptcy schedule
- Debts for property and income taxes
- Domestic court ordered obligations such as alimony or child support
How can bankruptcy benefit someone in the short term?
As soon as someone declares bankruptcy, they are protected from action by creditors. The automatic stay rule means that once someone files for bankruptcy, creditors can no longer make attempts such as calling or sending letters, to seek payment or repossess an item under loan. Anyone that has filed for bankruptcy and still had action taken against them by a creditor, should meet with an attorney as soon as possible.
What is the overall intention of bankruptcy?
Bankruptcy can help those who are facing severe financial distress, and want a way to start fresh by having a large portion of their debts eliminated. A person who declares bankruptcy may suffer a hit to their credit score, but that can be improved over the course of time. Those who file for chapter 13 bankruptcy can keep all of their property, but must pay back debts over the course of three to five years. In comparison, those who file for chapter 7 may have their property on loan seized, but in exchange can have some debts cleared entirely. A bankruptcy attorney Memphis relies on at Darrell Castle & Associates, PLLC can help you decide which chapter may be the right choice, depending on your financial situation.