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There are certain types of debts that typically will not be discharged in your bankruptcy. Those debts include items such as child support and alimony obligations, criminal fines and restitution, student loans, and recent tax obligations. However, each of these legal issues are quite complex, and in some instances part of the debt may be discharged in bankruptcy. You should take advantage of scheduling a free appointment with our office to discuss your particular circumstances, and allow us to review any questions you have about these type of debts.
Similarly, any debts that are secured in nature (i.e.; you have pledged certain collateral, or you are purchasing certain items over a period of time) need to be treated differently than your typical unsecured debts like medical bills, credit card debts, and loans based solely on your signature. The items that have been pledged as collateral require you to either surrender the items to the Creditor, or you can reaffirm the debt, or you can redeem the obligation by paying the fair market value of the collateral. Reaffirming the debt essentially treats the obligation under the same terms as the original contract, just as though you had not filed bankruptcy against the Creditor. The most difficult part of reaffirming an obligation is that most Creditors require you to become current on the contract before you are permitted to reaffirm. However, in the District of Utah, you are actually afforded a fourth alternative, and that is to simply remain current on the obligation without formally reaffirming the debt. Both alternatives have certain advantages and disadvantages that are case specific, and you should consult our office to discuss these alternatives before you make a final decision regarding your individual debts.
As you can see, the type of debts you owe have a direct impact on many factors related to filing a Bankruptcy Petition. Most often the type of debts you owe will dictate what relief you seek to obtain, and under which Chapter of the Bankruptcy Code you ultimately choose to file. It is for that particular reason that our office offers a free consultation to discuss the options that are available to you, and to “custom fit” your circumstances to the relief that is availed by the U.S. Bankruptcy Code.
Please schedule an appointment to meet with one of our attorneys if you would like to discuss your options in detail. We can let you know which Chapter would work best for your situation, and we can let you know what to expect once you file.
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