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Jan. 11, 2019

Bankruptcy Eliminates Most, but Not All Debts

It might start with one missed payment, but before you know it, you can wind up in a position that it seems impossible to ever climb out of debt. As your debt increases, so does your stress. Bill collectors call constantly. Credit cards are rejected at the store. In addition to feeling embarrassed and frightened, you might feel helpless and hopeless.

Bankruptcy can help you wipe out debts and regain your financial footing. Debts that can be wiped clean include unsecured debts, such as:

  • Medical bills

  • Credit card debt

  • Business debt

  • Gasoline and store charge cards

  • Lawsuit judgements

  • Negligence claims

  • Debts due to car accidents

  • Lease and contract obligations

  • Personal loans, including payday loans

  • Promissory notes

  • Unpaid rent

  • Utility bills

  • Mortgages

  • Auto loans and leases

  • Tax debt (in certain cases)

For some of these debts, such as federal taxes and court judgements, there are very specific rules about when and how these debts may be wiped clean. It’s important to consult an experienced bankruptcy lawyer who understands the nuances of which debts can and cannot be eliminated.

Debts that Cannot be Eliminated by Bankruptcy

Many of the debts that hit us the hardest can’t be wiped clean by bankruptcy, including:

  • Recent taxes

  • Student loans

  • Alimony payments

  • Child support payments

  • Court fines and criminal restitution

  • Payments for personal injuries caused by driving under the influence

  • Debts incurred after a bankruptcy filing

An experienced bankruptcy lawyer can help you through the complexities of bankruptcy disclosures and filings.

Property that is Protected from Bankruptcy Proceedings

Although bankruptcy can give you a fresh start, you will not be able to keep all your assets and property. Federal bankruptcy law has specific rules about which property and assets you can keep and which property and assets will be used to pay creditors. (This also varies based on whether you declare Chapter 7 or Chapter 13 bankruptcy.) The law allows you to choose whether to use federal or state guidelines. Texas has some very generous exemptions. You can compare Federal and Texas exemptions here.

Ask a Texas Attorney at Oliva Law to Discuss if Bankruptcy is Right for You

Overwhelming debt, creditor harassment and other financial stress factors can impact your finances, health, job performance and relationships. The Oliva law firm helps people in Brownsville, McAllen, Harlingen, Corpus Christi and throughout the Rio Grande Valley get a fresh start with bankruptcy and other debt management strategies. We can help you determine if bankruptcy is right for your specific situation.

About the Author: Marcos Oliva Marcos Oliva is the principal attorney at Oliva Law. He is admitted to practice law in the State of Texas, the United States District and Bankruptcy Courts in the Southern District of Texas, and the United States Patent and Trademark Office.

Jan 11th, 2019