6 Things You May Not Know You Can Do in Bankruptcy

Bankruptcy

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  • Can the State Harass Me Over Child Support After a Chapter 13 Bankruptcy?

    When you file for bankruptcy, the automatic stay goes into effect. This is a stop on all debt collection attempts from your creditors. It is meant to give you some “breathing room” as you work through the bankruptcy process. There are two notable exceptions to this stop: collection attempts for child support and collection attempts for alimony. If you are delinquent in your payment of either of these orders, the state is authorized to take actions to collect the money you owe. These actions can include wage garnishment and seizure of your tax return or lottery winnings.  It is Not Harassment; It is the State Ensuring your Children are Supported The reason why the automatic stay does not halt child support and alimony payments is…

  • Will Bankruptcy Help With Divorce Obligations?

    Sometimes, a divorce can trigger a financial crisis for one or both parties involved.  Adding divorce-related financial obligations like alimony or child support can cause significant problems, which may even lead to bankruptcy.  It is perhaps natural to wonder if filing for bankruptcy will eliminate any of these obligations. Support Obligations The U.S. Bankruptcy Code allows individual debtors to file under either Chapter 7 or Chapter 13 protection, depending on their income level and the nature of their debts.  Regardless of which chapter you file under, however, the Code is clear: support obligations are not dischargeable in bankruptcy.  Support obligations, by the Code’s definition, include nearly every expense associated with them: alimony, child support and lawyer fees, connected with alimony and child support. The rationale…

  • Dispelling Myths about Filing for Bankruptcy

    Filing for bankruptcy is a big step toward regaining control of one’s finances, but for many people contemplating this decision, negative myths can delay taking action. Life is full of unanticipated and uncontrollable events that can derail a person’s financial security – major illness, serious accidents and long-term unemployment – to name just a few, and bankruptcy exists to help these individuals get out of this untenable situation and start over with a clean slate. Bankruptcy offers those overwhelmed with financial concerns the ability to find peace of mind again by allowing them the ability to have a fresh, debt-free start. However, before initiating the bankruptcy process it is important to dispel some myths about the process and repercussions so debtors have a better sense…

  • How Will My Bankruptcy Affect My Spouse?

    Bankruptcy is a last resort for the overwhelming majority of people. If you are forced by circumstance to have to file, you almost certainly have a thousand questions about the future, and that load doubles if you are married. Many couples file for bankruptcy jointly, but this is not always the best choice, and either way, it is important to be aware of the potential effects on both your and your spouse’s financial future whether or not you choose to file jointly. Should We File Together? In some situations, it can actually be advantageous to file for bankruptcy as a couple, most often if your financial situations are comparable. If both of you are heavily in debt, it may simply save time and money to…

  • Best Practices to Do Prior to Filing for Bankruptcy

    When you are facing an insurmountable level of personal debt, bankruptcy can be the way out. Although bankruptcy is not a legal process to take lightly, it is one to seriously consider if you feel like you cannot take control of your debt through other means. You can make the bankruptcy process easier for yourself by taking the time to educate yourself about all that the process entails. Use what you learn to prepare for your bankruptcy before you file. By taking the following steps before you file for Chapter 7 or Chapter 13 bankruptcy, you can make the process less stressful for yourself. Seek Credit Counseling By law, you are required to receive credit counseling from an accredited credit counseling agency before you can…

  • Considering Bankruptcy During Tax Time

    If you are like the numerous other Americans who file for bankruptcy protection every year, you may be concerned about the long-term implications of filing. Maybe you worry how you will be able to afford a bankruptcy lawyer, or how long it will take to rebuild after the initial financial crash. But one thing you may not be thinking about is your taxes. Before you file your returns, here is what you should know about bankruptcy and taxes. What happens to my tax refund if I file for bankruptcy? It is important to consider what type of bankruptcy you are filing. In general, however, the bankruptcy court is concerned with making sure your creditors get paid as much as possible, while allowing you the protections…