This Week On LawCall™ — Bankruptcy
LawCall™ is a weekly, thirty minute call-in show about legal topics of interest. Each week, we discuss personal injury, auto accidents, truck accidents, medical malpractice, wrongful death, slip and fall, DUI accidents and birth injuries, as well as bankruptcy, family law, divorce, landlord and tenant law, dangerous and defective products, legislative matters, and current issues in the legal world. We take your calls LIVE every Sunday at 11:35pm. Call us at 1-877-525-LAWS (5297) during the show.
This Week On LawCall™ — Bankruptcy
Are you struggling with financial problems and considering bankruptcy as a way out? If so, you need to tune in to LawCall™ this Sunday, when Tallahassee personal injury attorney Dana Brooks, and her guest will discuss bankruptcy. What are the pros and cons of filing for bankruptcy? What type of bankruptcy would be best for your situation? Will you lose your home? Will your credit be ruined? If you have a question about whether bankruptcy is the best solution to your money troubles, Tallahassee personal injury attorney Dana Brooks and her guest will be answering your questions this Sunday, September 20, 2015, on LawCall™.
What exactly is bankruptcy? Will it wipe out all my debts?
Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as “liquidation” (Chapter 7) or “reorganization” (Chapter 13). Under a Chapter 7 bankruptcy, you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a Chapter 13 bankruptcy, you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all, depending on what you can afford. When you file either kind of bankruptcy, a court order called an “automatic stay” goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.
Certain debts cannot be discharged in bankruptcy; you will continue to owe them just as if you had never filed for bankruptcy. These debts include back child support, alimony, and certain kinds of tax debts. Student loans will not be discharged unless you can show that repaying the debt would be an undue burden, which is a very tough standard to meet. And other types of debts might not be discharged if a creditor convinces the court that the debt should survive your bankruptcy.
What Bankruptcy Can Do
If you are facing serious debt problems, bankruptcy may offer a powerful remedy. Here are some of the things filing for bankruptcy can do:
Wipe out credit card debt and other unsecured debts. If you file for Chapter 13 rather than Chapter 7, you may have to pay back some portion of your unsecured debts. However, any unsecured debts that remain once your repayment plan is complete will be discharged.
Stop creditor harassment and collection activities. Bankruptcy can stop creditor harassment, and if the harassment is more serious — for instance, if the creditor is about to repossess your car or foreclose your mortgage — bankruptcy can help.
Eliminate certain kinds of liens. A lien is a creditor’s right to take some or all of your property and will survive bankruptcy unless you invoke certain procedures during your bankruptcy case.
What Bankruptcy Can’t Do
Here’s what bankruptcy cannot do for you:
Prevent a secured creditor from repossessing property. A bankruptcy discharge eliminates debts, but it does not eliminate liens.
Eliminate child support and alimony obligations. Child support and alimony obligations survive bankruptcy — you will continue to owe these debts in full, just as if you had never filed for bankruptcy.
Wipe out student loans, except in very limited circumstances. Student loans can be discharged in bankruptcy only if you can show that repaying the loan would cause you “undue hardship,” a very tough standard to meet.
Eliminate most tax debts. Eliminating tax debt in bankruptcy is not easy, but it is sometimes possible for older debts for unpaid income taxes. There are many requirements to be met, however.
Eliminate other nondischargeable debts. The following debts are not dischargeable under either Chapter 7 or Chapter 13 bankruptcy:
- debts you forget to list in your bankruptcy papers, unless the creditor learns of your bankruptcy case
- debts for personal injury or death caused by your intoxicated driving, and
- fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution.
If you file for Chapter 7, these debts will remain when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your repayment plan. If they are not repaid in full, the balance will remain at the end of your case.
In addition, some types of debts may not be discharged if the creditor convinces the judge that they should survive your bankruptcy. These include debts incurred through fraud, such as lying on a credit application or passing off borrowed property as your own to use as collateral for a loan.
What Only Chapter 13 Bankruptcy Can Do
Chapter 7 can’t help you with these situations, but Chapter 13 can:
- Stop a mortgage foreclosure.
- Allow you to keep nonexempt property.
- “Cram down” secured debts that are worth more than the property that secures them.
LawCall™ features Tallahassee personal injury attorneys, Vinse Barrett, Jimmy Fasig, Dana Brooks, and Mark Nonni, plus guest attorneys from across North Florida who answer your questions on a different legal topic every Sunday. Long-time newscaster Frank Ranicky anchors the program.