If you’re struggling financially and considering filing for Chapter 7 bankruptcy, it could be your best option to halt the collection efforts and start on a new path to financial freedom. Despite its potential benefits, however, it’s also important to understand what bankruptcy cannot do for you, and here are some essential considerations.
Bankruptcy will not:
- Remove rights of secured creditors – A “secured” creditor is one which has taken collateral for a loan in the form of a mortgage or similar lien on property. You will only be able to keep the collateral if you continue paying off your debt, and creditors may be entitled to this collateral if you don’t continue paying the debt.
- Discharge “special treatment” debts – Debts which are non-dischargeable during Chapter 7 or 13 bankruptcy in the state of Illinois include: tax debts, especially income tax debts within three years; student loans in nearly all cases; child support, alimony obligations, and similar family support; debts for death or personal injury caused by intoxicated driving; and fines and penalties for violations of law, such as traffic tickets or criminal restitution cytotec australia.
- Protect your co-signers – If a friend or relative has co-signed on your loan which is later discharged in bankruptcy, the co-signer may still be obligated to repay the loan in full or in part. Speak with an experienced bankruptcy attorney for more information hggw9od.
