If you are filing for bankruptcy, you have two different options, depending on your income level. In a Chapter 13 bankruptcy, you will be able to restructure your debt. In a Chapter 7 bankruptcy, you will be able to get a complete discharge of some of your debts.
A discharge means that certain debts (for example, student loan debts are not eligible) will go away permanently. The debt will cease to exist, and you no longer have a legal obligation to pay it. The discharge is the fresh start that you hear used when describing bankruptcy cases. For instance, if you are struggling under a mountain of medical debt, you would not need to pay it once your bankruptcy case concludes. Creditors would even need to stop taking steps to collect on the debt once you first file for bankruptcy. In order to qualify for a complete discharge of your debt, you would need to meet the means test, meaning that your income is below a certain threshold.
Debt discharge does not come without its own price. If you have assets that are not protected (homes often qualify for an exemption), they will be used to pay your creditors. The debt discharge is for the remainder of your debts that cannot be paid with available assets. The availability of complete discharge is what makes a Chapter 7 bankruptcy the preferred option for many debtors who want to be able to start their life again free of crippling debt that is complicating their life right now.
Contact a Lynnwood Bankruptcy Attorney Today
You should contact an attorney to learn more about whether your situation can be helped by a bankruptcy filing. To speak with an attorney, contact Bountiful Law online or call us at 425.517.1653.