What Does Bankruptcy Not Do?
While bankruptcy is a great option for many who are unable to pay back their debts, it is not a cure for every financial issue you may have. There are many things bankruptcy can do, including discharging much of your debt. However, there are some things it cannot do. Bankruptcy does not usually allow the elimination of certain “secured” creditor rights. A “secured” creditor is one who has a mortgage or lien on a property as collateral for a loan. This typically includes home mortgages and car loans. While the court can rule that secured creditors must take payments over time during the bankruptcy process, the bankruptcy can only eliminate your obligation to pay if your property is taken. This means that you cannot keep collateral, like your house, unless you continue to pay the debt post-bankruptcy. Some specific types of debts are singled out by Arizona bankruptcy law and cannot be discharged. This include child support, alimony, criminal fines, student loans (with a few slight exceptions), court restitution orders and some taxes. A bankruptcy judge also has the right to declare other types of debt as non-dischargeable in bankruptcy if the creditor challenges the request to discharge them. This typically includes:
- Debts incurred on the basis of fraud.
- Luxury goods purchased on credit that are over $1000 and made within 60 days of filing for bankruptcy
- Loans or cash advances of over $1000 taken within 60 days of filing for bankruptcy
- Debts from willful or malicious injury to another person or their property
- Debts owed under a divorce decree or settlement
There are many types of debt that cannot be discharged during bankruptcy, contrary to popular belief. This is why you need a skilled and experienced bankruptcy attorney by your side throughout the entire process.
How a Bankruptcy Attorney Can Help You
The team at the Oswalt Law Group in Phoenix has the experience you need when filing for bankruptcy. We understand the many ins and outs of Arizona bankruptcy law and can help you build a case and set you up for the best possible outcomes. We are on your side and want to help you escape from your crushing debt and have a bright and debt-free financial future. Bankruptcy is not something you should take lightly. There will be repercussions from bankruptcy for years to come. Get the best help with this difficult task by calling the Oswalt Law Group today.