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What Bankruptcy Wipes out All Debt?

April 13, 2021

There are few things more frightening than the prospect of losing your home, which is why if you are in deep financial trouble, you are most likely now looking into filing for bankruptcy. Among the most popular bankruptcy options is Chapter 7, for various reasons. If you think bankruptcy may be right for you, please read on and reach out to our experienced New Jersey bankruptcy attorney to learn more about Chapter 7 bankruptcy and how our firm can help you through the legal process going forward. Here are some of the questions you may have:

What Does Chapter 7 Bankruptcy Mean?

Chapter 7 bankruptcy is one of the two primary types of bankruptcy, along with Chapter 13. Chapter 7 is known as liquidation bankruptcy, and it is an ideal means to a “fresh start” for many individuals. Essentially, when you file Chapter 7 bankruptcy, it will erase most of your debts in exchange for your bankruptcy trustee selling your nonexempt property to partially repay your creditors. In many cases, when you file a Chapter 7 bankruptcy, you can keep most of your property.

What Are Unsecured Debts?

Unsecured debts are debts that are generally not directly linked to property; instead, unsecured debts consist of credit card debt, medical expenses, and other debts of that nature. When you file for Chapter 7 bankruptcy, in many cases, you can wipe out all those debts and start anew. That being said, there are certain unsecured debts that are not dischargeable by bankruptcy, including things such as child support, tax debts, alimony payments, and, in most cases, college student loan debt. If you think you have enough unsecured debts to qualify you for Chapter 7 bankruptcy, you should not hesitate to speak with our knowledgeable firm today.

Can I Keep My Home After Filing for Chapter 7 Bankruptcy?

Fortunately, those who file for Chapter 7 bankruptcy can keep their homes, cars, and most of their additional property, such as clothes, jewelry, collections, and furniture. When you file for bankruptcy, you immediately trigger what is known as an “automatic stay,” even if you file right before foreclosure. Many people are relieved to learn this, which is why Chapter 7 bankruptcy is such a popular option amongst debtors.

Contact Our Experienced New Jersey Firm

Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. That is why we are confident we have what it takes to provide you with the effective legal counsel you need. If you need experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.