Filing For Bankruptcy - Which Debts Are Discharged?
If you go in for a bankruptcy, you will get the protection of the law and you will be discharged from your liability to repay your debts.
The word discharge means that you need not repay your debts despite the fact that you have the obligation to so.
The contract between you and your lender is overridden by the decision of the court.
Needless to say, the loss suffered by the lender will be reflected in your poor credit history and credit report.
However, it is incorrect to say that each and every debt you owe will automatically get discharged once you go in for a bankruptcy.
There are certain debts that are not discharged as per the law.
One of the best example of such a debt is your alimony payment and your child maintenance payment.
Further, your tax liability to the government is not discharged and your assets are invariably diverted towards the repayment of this liability at the very beginning.
Further, you can be rest assured that your secured debts would not get discharged.
If your assets are not sold off because they exempted, then you will have to bear the liability that is owed on these assets.
For example, if your house or property is not disposed off, then the loan that you have taken on the house and for which you have offered the house is security will have to be repaid.
If this is not done, the lender will have the option of approaching the court and recovering the money by seeking a foreclosure.
This may come as a surprise to you but it is true that the bankruptcy does not discharge all your debts.
Considering this, don't you think it is better to go in for a debt settlement deal? Since you shall be losing the possession of your house and automobile to repay the loan that you have taken on the same, only your unsecured debts will be discharged.
Rather than losing all your assets and still ending up with a debt problem, it makes more sense to get in touch with your lender and request debt settlement deal.
This transaction is unusually beneficial one which will help the lender recover a small amount and the borrower reduce the total amount payable.
Of course, if settlement does not work for you, you can always go in for a bankruptcy.
There is nothing stopping you from my exercising this option even after you have tried your hand at a debt settlement.
The word discharge means that you need not repay your debts despite the fact that you have the obligation to so.
The contract between you and your lender is overridden by the decision of the court.
Needless to say, the loss suffered by the lender will be reflected in your poor credit history and credit report.
However, it is incorrect to say that each and every debt you owe will automatically get discharged once you go in for a bankruptcy.
There are certain debts that are not discharged as per the law.
One of the best example of such a debt is your alimony payment and your child maintenance payment.
Further, your tax liability to the government is not discharged and your assets are invariably diverted towards the repayment of this liability at the very beginning.
Further, you can be rest assured that your secured debts would not get discharged.
If your assets are not sold off because they exempted, then you will have to bear the liability that is owed on these assets.
For example, if your house or property is not disposed off, then the loan that you have taken on the house and for which you have offered the house is security will have to be repaid.
If this is not done, the lender will have the option of approaching the court and recovering the money by seeking a foreclosure.
This may come as a surprise to you but it is true that the bankruptcy does not discharge all your debts.
Considering this, don't you think it is better to go in for a debt settlement deal? Since you shall be losing the possession of your house and automobile to repay the loan that you have taken on the same, only your unsecured debts will be discharged.
Rather than losing all your assets and still ending up with a debt problem, it makes more sense to get in touch with your lender and request debt settlement deal.
This transaction is unusually beneficial one which will help the lender recover a small amount and the borrower reduce the total amount payable.
Of course, if settlement does not work for you, you can always go in for a bankruptcy.
There is nothing stopping you from my exercising this option even after you have tried your hand at a debt settlement.
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