What Can Bankruptcy Do for Me?
Bankruptcy may make it possible for you to:
- Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start.
- Stop or substantially delay foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments.
- In some cases, “strip off” a second mortgage if the value of your home exceeds the balance on the first mortgage.
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop debt collection calls, harassment, lawsuits, and similar creditor actions.
- Restore or prevent termination of utility service.
- Challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
- Actually improve your credit score, as your old debts, defaulted debts, and bad debts are discharged.
What Bankruptcy Cannot Do
Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
- Eliminate child support, alimony, other debts related to divorce, most student loans, court restitution orders, criminal fines, and some taxes.
- Protect cosigners on your debts. When a relative or friend has co-signed a loan, even though the debt is discharges as to the debtor in bankruptcy, the cosigner may still have to repay all or part of the loan.
- Discharge debts that arise after bankruptcy has been filed.
Bankruptcy cannot solve all money problems. If your income is insufficient to pay your mortgage and other regular bills you may need to consider making significant and painful choices, which may well include a bankruptcy filing. In addition, there are restrictions upon filing another bankruptcy proceeding after receiving a discharge.
Remember, the law often changes and each case is different. This information was meant to give general information and should not be considered a substitute for legal advice.
A decision to file bankruptcy should be made only after determining that bankruptcy is the best way to deal with your financial situation. A consultation with an experience bankruptcy attorney can help. Call the Lawyer Referral Service of the New Hampshire Bar Association today for a referral at 603-229-0002 or request a referral online.