Does Bankruptcy Cancel All Debts That You Have?

There are people who suppose that filing bankruptcy is a magical thing that is able to solve all their problems at once. However, filing bankruptcy is the best thing to spoil their credit history for several following years in one gesture.a man with papers near a laptopIf you feel that bankruptcy is eventually showing up on your horizon, you need to remember that bankruptcy is the last means that you should use. Lenders treat people who file bankruptcy in a quite different way. So, if you do not want to rack your brains on how to erase consequences of bankruptcy from your credit history, you should remember that there are less harmful ways to cope with your financial crisis.

A List of Debts

Besides that, there are people who are completely ignorant in matters of debts and ways to discharge them. If the fact that not all debts can be solved with the help of bankruptcy is a piece of news for you, you should read this list and find out whether bankruptcy will help you in at least something. So, debts that cannot be discharged in such a way involve:

  • taxes,
  • alimonies and child support,
  • fines and penalties,
  • fines for injuries that are caused by driving under the influence of alcohol,
  • fines for deliberate damage of property or injuring a person,
  • educational loans,
  • payment for condominiums and so on.

When It Can Help

Bankruptcy is a good way to take a new start in case debts you have are only credit card debts, a car credit or medical bills. Such debts can be discharged or, at least, re-planned in such a way that you would not need to raise your last money to pay the debt back. A lot depends on the way you decide to file bankruptcy. There are two main chapters of the law that foresee two different schemes of paying debts back. One of these chapters means that all the possessions of debtors will be seized and sold, while the money will be distributed among lenders as a part of the debt. Another chapter means that the debt will be paid back in any case but the scheme will be different and more favorable for debtors.

While the first scheme is available for everyone, the second scheme can be used only in case you still have some money and it keeps coming, so that you will be able to pay the debt back by the due time.

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