Understanding What Bankruptcy Can & Cannot Do

Bankruptcy is a potent solution for those in financial distress.

But you must bear in mind that some kinds of debt cannot be eliminated in bankruptcy.

Bankruptcy lawyers in Maryland have been consistently counseling their clients that they should make sure to understand which debts will be wiped out and which they will have to retain.

Chapter 7 and Chapter 13, the two most common types of bankruptcy, will get rid of credit card debt, but important liabilities like child support, secured debt, taxes, and alimony and education loans, will remain.

Here is how bankruptcy can help you.

It is an excellent tool to wipe out credit card debt. However you must keep in mind that the credit card you possess must not be a special secured one.

Some of the other debts that are dischargeable under Chapter 7 include:

• medical bills
• auto accident claims
• business debts
• dishonored checks
• Unpaid taxes past a specified number of years
• money owed under lease agreements

Bankruptcy lawyers in Maryland have also been reiterating that a debtor does not have an unqualified right to a discharge.

“If you want to receive a discharge, you must abide by the bankruptcy code”, says an attorney at a bankruptcy law firm in Maryland. “Section 727(a) of the bankruptcy code lists out reasons why the court may disallow you a Chapter 7 discharge”.

The reasons to deny discharge are:

• If you commit perjury or other deceptive acts in connection with your bankruptcy case
• If you violate a court order
• If you have been concealing property with a view to obstruct your creditors
• If you have not completed a course in personal financial management. Before you are granted a bankruptcy discharge, you must file a certificate that endorses the fact that you underwent a debtor education course.
• If you are unable to account for missing assets

You must also remember that a creditor can successfully object to a discharge.

Such situations can include:

• Credit card purchases for certain luxury items owed to a single creditor
• Cash advances totaling more than a specified amount
• If you have incurred debts by deceit or false pretenses
• If you have incurred debts by causing willful injury to a person or to the property of another

If you are considering bankruptcy as a solution to dealing with your financial distress, you may want to know more about how it works.

It is a good idea to consult bankruptcy lawyers in Maryland to get inclusive counsel.