Does Filing for Bankruptcy Eliminate All Debt?

Often, filing for bankruptcy can be a daunting task. In fact, too many laypeople, it sounds terrifying. Some may even be embarrassed to file for bankruptcy. When we talk of bankruptcy, we often feel uneasy that something terrible is going to happen. That’s the kind of effect Bankruptcy has over many people. However, before jumping to any conclusion, let us clear this fact that in certain extreme circumstances, there is no other option than to call it all off and file for bankruptcy. But before you do so, it is essential to gain knowledge about some intricate factors associated with it. 

Filing for bankruptcy is a legal process, and hence you would need the expertise of an avant-garde Philadelphia Bankruptcy Lawyer to help you assess your financial danger zone. Upon further inspection, you might find that, in extreme cases, when you’re left with no other option, it is perhaps the most suitable tool for sorting out your debt problems. In many cases, bankruptcy has been proved to be a potent tool that has helped umpteen Americans regain financial stability. But, one crucial thing to note here is that, while filing for bankruptcy may lead you to regain your financial strength, it does not, however, eliminate all your financial obligations.  


Is Filing For Bankruptcy Necessary?

There is indeed no doubt that this legal procedure takes the guts out of every individual who goes through it. However, many people find it hard to admit that they need assistance in coming out of debt. It is a two-way financial tool that safeguards not only the creditors but also debtors. One of the core reasons why declaring bankruptcy is required is because when Individuals have loads of debts from either taking credits for thwarted business or other reasons, they do themselves a favor by declaring it. That is why it’s essential to file for bankruptcy after consulting with a good Philadelphia Bankruptcy Lawyer.

Is Assessing My Financial Affairs Important?

Of course, filing for bankruptcy is like declaring a personal emergency. Additionally, when someone declares an emergency, it is usually in the wake of the determining factors that lead one to take such a significant step. Likewise, before filing for bankruptcy, It is always fair to assess the legal and financial aspects of your condition. For instance, if you are unsure of how much you owe your creditors, or whether you are in for debt consolidation, it is best to thoroughly assess your assets and liabilities. Furthermore, if you find that the value of your assets is less than the liabilities you owe, declaring bankruptcy might be the only option. In such cases, you should seek help from an experienced Philadelphia Bankruptcy Lawyer.

How Many Debts Can Be Eliminated After I File For Bankruptcy?

As mentioned in the beginning, while filing for bankruptcy does lighten up your burden of financial liabilities and often renders freedom, it does not, however, eliminate all your debts. Instead, as your Philadelphia Bankruptcy Lawyer might inform you, two provisions in the Philadelphia Bankruptcy law can help you in getting rid of most of your debts. This provision is in the form of two categories, namely:

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  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy

Elimination Of Debts Under Chapter 7 Bankruptcy. When you file for a consumer Bankruptcy in Philadelphia or anywhere else in Pennsylvania, under chapter 7 Bankruptcy, you are entitled to discharge debts that can be eradicated by bankruptcy. These types of debts include removing impending debts on debit and credit cards, medical debts, and personal loans, and also having debts incurred from a business. This is one good reason to hire a Philadelphia Bankruptcy Lawyer. In hindsight, some of the most frequent causes for which people file for bankruptcy are unemployment and overextended credits. Chapter 7 Bankruptcy liquidating your assets to pay off most of your debts! 

Elimination Of Debts Under Chapter 13 Bankruptcy. Also known otherwise as to the ‘Reorganization Bankruptcy,’ Chapter 13 bankruptcy is for those people who wish to acquire again the property they have as an asset.  If you are a person who’s assured of a consistent income, this form of bankruptcy is the best suited for you! Chapter 13 bankruptcy allows people to pay off their debts within a grace period of 3 to 5 years after filing for it. Be sure to have a Philadelphia Bankruptcy Lawyer present by your side at the time of filing it. Chapter 13 has this unique prowess that it offers the individuals. In this grace period, the bankrupt individuals are allowed to continue working and pay off their debts, and at the same time, keep their assets and possessions. 

Bankruptcy – A Door To New Possibilities 

For the final verdict, bankruptcy might initially seem like a daunting risk to take and might shake the guts of a person stuck in a financial turmoil that lands them into doing this; but don’t we require to give everything a well-inspected and observant look? Filing for or declaring bankruptcy has its own set of comforts. Even so, declaring bankruptcy shouldn’t be considered a child’s play, and you need to keep the consequences in your mind. A wise play would lead you on the right path of recovery, considering you had a Philadelphia Bankruptcy Lawyer helping you all the while! 


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