What Can Bankruptcy Do For You?

If you’re in debt and are considering bankruptcy, you may wonder just what bankruptcy will accomplish for your financial situation. Will it erase all of your debt? Will you get to keep all of your property? The consequences and benefits of filing depend on several factors, and I’d be glad to look at your specific circumstances and offer advice and solutions, while educating you about the long-term effects of various decisions.

The Power of Bankruptcy

One of the things that makes being in debt so stressful are the calls and letter from creditors when you know there’s no way you can keep up with the payments. As soon as you file bankruptcy, the automatic stay begins, which means you’ll no longer need to deal with creditors or collection agencies. This frees up some emotional space to make a plan for tackling your debt.

By filing a Chapter 7 bankruptcy, it is possible to discharge your credit cards and other unsecured debts such as medical bills, utilities, and personal loans. If you file a Chapter 13, you’ll need to make reduced payments for 3-5 years, but at the end of that time, the remainder of your unsecured debt balance is discharged. A Chapter 13 can also stop foreclosure proceedings on your home. This will give you time to get caught up on payments if you’re able to prove to the court that you have enough income to stick to your plan.


While there are many ways that bankruptcy can help you, there are some limitations to what it can do to change your financial situation. Some debts may not be included in bankruptcy, including debts you didn’t list on your filing paperwork or debts you incur after filing. Child support and alimony may not be included in a bankruptcy, but you may be able to have the amounts modified if your income has changed significantly. Even in a Chapter 13, you will need to keep paying alimony and child support after your repayment period.

Student loans and back taxes may be discharged through bankruptcy under very specific circumstances, but this is rare. In general, if you’re having trouble keeping up with these payments, your best bet is to change your payment plan or make room in your budget by discharging other types of debt.

If you have secured debt, such as an auto loan or mortgage, filing bankruptcy won’t keep your creditor from repossessing your property. You may be able to keep your property if you stay up to date on payments, but you can’t just include these debts in your bankruptcy and also keep your belongings.

Here For You

Filing bankruptcy is a huge decision and one that’s best made under the advice and guidance of a professional bankruptcy attorney. I can make sure you avoid some of the common mistakes that people make when filing and can ensure you’re educated about how to rebuild your credit once your case is resolved. If you have questions about bankruptcy, give me a call and we can discuss your options.