Bankruptcy can be quite specific and technical for a common person to understand. This has caused many problems as people fear the repercussions more than understanding the benefits it offers. You will be surprised to know that unlike other forms of debt relief, bankruptcy is quite simple. Lawyers of Los Angeles based bankruptcy law firm Recovery Law Group, answer some of the prominent queries raised by people regarding bankruptcy.
1. Will I end up losing all my possessions?
Liquidation of assets takes place in the case of Chapter 7 bankruptcy. In that case, too, most assets of bankruptcy filers are exempted through state or federal exemptions, and only non-exempt property can be sold off to repay creditors. Most people can save almost all their assets through exemptions, though they may have to let go of luxury items.
2. Can the creditors sue me?
Filing for bankruptcy puts an end to all collection actions including repossession and foreclosure. It also protects you against any possible lawsuit filed by creditors. The creditors cannot sue you in the future too if the debts were included in your bankruptcy and discharged. However, for jointly held debts that were not discharged in bankruptcy, you or your spouse could be sued by the creditors.
3. Can my taxes be discharged in bankruptcy?
Some debts can survive a bankruptcy discharge. These include student loan debt and taxes. Certain taxes like some income tax can be discharged in bankruptcy while taxes like property and sale tax are not discharged during bankruptcy.
4. Is it mandatory for my spouse to file for bankruptcy too?
It is not essential for spouses to file for bankruptcy jointly. However, if the majority of the debts are jointly held, then filing jointly would be helpful. You can save on filing fees and attorney charges. However, the best judge of the situation would be a qualified lawyer. You can discuss this issue with experienced bankruptcy attorneys at 888-297-6023.