Bankrupty by Types of Debt
It is certainly helpful to review whether to file by the kind of debts that you have. Here are some of the most common types:
This is merely information, and you will want to contact attorney Roger Slain for a more complete analysis of your specific situation.
Credit Card Debt
The most common type of debt people like you have is credit card debt. Why? Because the big credit card companies and banks have been seducing you with offers of new credit cards, lower interest rates, courtesy checks and cash advances for years.
Home Loans or Foreclosure
Understandably, there is concern about what happens to your house if you file bankruptcy. Assuming you stay current with your mortgage, your home may be safe. (if not current, a bankruptcy can help with stopping foreclosure).
Car Loans & Repossession
People are understandably concerned about car repossession if the consumer files bankruptcy. The answer is almost always "no" if they remain current on the car loan. Keep current on your car and you likely will not lose it.
Student Loans
Student loans, generally, are not dischargeable under any chapter of the Bankruptcy Code. A Bankruptcy can, however, eliminate other debts that are competing for your dollars and provide a measure of peace during a Chapter 13 plan. Further, in a Chapter 13, some courts permit the debtor to separately classify a student loan so that a greater percentage of disposable income goes to the student loan than non-secured debt.
Eliminating Tax Debt
Like most debts, back taxes can turn into major problems. It's helpful then to know the rule about taxes and bankrutcy. In general, some tax debt is eliminated in a bankruptcy.
Judgments and Lawsuits
Being sued with a lawsuit is one reason many people contemplate filing bankruptcy. It's a factor, but only one, that should be considered.