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Will Bankruptcy Discharge all my Debt?

Are you in over your head with debt? Do you have insurmountable financial hardships? Filing for bankruptcy can wipe out most, if not all, of your unsecured debt. Both Chapter 7 and Chapter 13 have viable debt relief options available depending on the type of relief you are looking for. No, bankruptcy may not eliminate all of your debt, there are some legal exceptions in the bankruptcy code. For example, if you owe back payments for child support or alimony those will not be discharged. Any fines or monetary penalties that you owe to the government are also exempt. Any taxes, whether state, local or federal are all required to be paid back.

Student loans are a grey area when it comes to exemptions. Some student will be discharged if you are able to prove that paying them would cause you severe financial hardship. Otherwise, the majority of student loans will still need to be repaid. Make sure that you list all of your debts in your bankruptcy petition when you first file because any that are excluded will not be discharged. If you obtained a loan by giving a creditor false or misleading information then you will still be financially responsible to pay it. Any court fees that were accrued through the commission of a violent crime or driving under the influence, will not be eliminated and will remain outstanding. Lastly, if you have any liens or mortgage payments that were not covered in the bankruptcy will continue to be your liability.

If you need more immediate debt relief, Chapter 7 bankruptcy would be recommended for you. Most applicants experience debt discharge with this type of bankruptcy only 90 days after filing. Chapter 13 bankruptcy is a more extensive and thorough process but it also better protects your property and your assets. With Chapter 13 you negotiate with your creditors and come up with a more realist repayment plan that usually gives you 3-5 years to pay off all your debts. Once you successfully complete your payment plan then those debts will be discharged. To find out further information about discharging your debt, fill out our online bankruptcy evaluation form today.

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