When filing for bankruptcy, it is important to know the criteria for filing bankruptcy. Bankruptcy can offer you numerous benefits, but also with some costs. We will outline those for you here.
Bankruptcy can eliminate your legal obligation to pay most if not all of your debts. It is important to meet the criteria for filing bankruptcy. Filers for bankruptcy frequently must take a test based on their income in order to qualify for bankruptcy. For individuals, one of the requirements is to go through credit counseling within 180 days of filing for bankruptcy. For married couples where only one member files for bankruptcy, one of the criteria for filing bankruptcy is that only joint property can be liquidated in order to settle the debts. Individuals must also file a voluntary position in order to fit the criteria for filing bankruptcy.
It is important to keep in mind what bankruptcy can not do. It can not eliminate certain rights of “secured” creditors. A secured creditor is some entity that has taken a mortgage as collateral for the loan. The most common “secured” creditors are home mortgages and car loans. The general rule is that you cannot keep the home or car unless payments are maintained throughout and after bankruptcy. Bankruptcy also cannot discharge debts such as alimony, child support, some student loans, some taxes, and various other debts. Finally, bankruptcy cannot protect the cosigners on your debts. The cosigner may still have to pay all or part of the loan.
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