A bankruptcy petition may be the push you need to get yourself out of an immediate financial emergency. But you must understand that undergoing these legal proceedings will not take away all of your problems. In other words, the New York State bankruptcy court may still hold you accountable for paying back certain outstanding debts. Read on to discover whether bankruptcy can erase all your debts and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you receive the maximum amount of financial relief.
Does Chapter 7 bankruptcy erase all my debts?
Namely, filing for Chapter 7 bankruptcy may allow you to erase mounting medical bills, personal loans, and credit card debts from your immediate responsibility. It may even get rid of your outstanding obligations under a lease or otherwise a binding contract. However, the federal bankruptcy code specifically excludes various categories of debt from possible discharge. Such categories read as follows:
- Certain types of tax claims.
- Certain types of spousal support and child support.
- Debts to certain types of tax-advantaged retirement plans.
- Debts to governmental agencies for certain fines and penalties.
- Debts from government-funded or guaranteed educational loans.
- Debts from your willful and malicious injuries to a person or property.
- Debts from personal injuries caused by your operation of a motor vehicle while intoxicated.
- Any other debts that you have not set forth on your bankruptcy lists and schedules filed with the court.
Is it possible to discharge any debts in a Chapter 13 bankruptcy?
The debts that may be erased by a Chapter 13 bankruptcy may be more limited than what is offered in a Chapter 7 bankruptcy. However, unlike a Chapter 7 bankruptcy, you may be eligible to discharge debts from your willful and malicious injuries to a property; debts incurred from paying nondischargeable tax obligations; debts arising from property settlements in a divorce; and more.
It is important to mention that it may only be possible to discharge these debts once you fulfill all the requirements set forth by your Chapter 13 repayment plan. But if your current situation requires that you be offered immediate relief, then you may request for the New York State bankruptcy court to grant you a hardship discharge. With this, you may have to prove the following:
- You have undergone circumstances beyond your direct control that have hindered you from completing your repayment plan.
- You have paid your creditors at least as much as they would have received if you had undergone a Chapter 7 bankruptcy process.
- You have concluded that a modification to your Chapter 13 repayment plan would still not be enough to offer immediate financial relief.
Without a doubt, your next step should be to employ a competent Rockland County bankruptcy attorney. So please reach out to us at The Law Offices of Allen A. Kolber, Esq. immediately.
