Filing for bankruptcy may make it possible to eliminate credit card, medical or other types of debts in a matter of months. In some cases, it might be possible to obtain protection from creditors without relinquishing any of your property. Let’s take a closer look at what you need to know about the bankruptcy process.
You’ll need to take a credit counseling course
Prior to filing for either a liquidation or reorganization bankruptcy, you will need to participate in a credit counseling session. This session must be completed no more than 180 days before your petition is submitted to a bankruptcy court. The judge who oversees your case may waive the credit counseling requirement if doing so would create an undue hardship.
You’ll need to be transparent about your finances
The bankruptcy petition that you’ll submit to the judge overseeing your case will contain detailed information about your existing debts, assets and other liabilities. Failing to disclose information relevant to your case could result in the matter being dismissed or delayed.
Not all debts can be discharged
As a general rule, alimony, child support and most tax debts cannot be discharged through bankruptcy. The same is often true of private or federal student loan debt balances. It is important to note that you can reaffirm an auto, home or personal loan during a bankruptcy – personal proceeding.
If you’re struggling to pay down existing debts, bankruptcy might allow you to reduce or eliminate them. An attorney may be able to provide insight into the potential benefits of filing for protection from creditors. Furthermore, legal counsel may be able to talk more about what you can expect before, during and after a bankruptcy case is complete.