While many people see bankruptcy as a way of getting out of debt, not all debts are eligible for bankruptcy. In order to figure out if bankruptcy is right for you, you need to understand if the type of debt you have can be included in a Chapter 13 bankruptcy.
You should try to catch up on your mortgage payments before filing for bankruptcy. Your mortgage payment is an ongoing expense, so if you stop making them, you'll lose your home.
The only way to discharge mortgage arrears or future payments in bankruptcy is to have the bank foreclose on your home. Since the mortgage is secured by your home, the bank can sell your home to pay off your mortgage. The only thing you can charge in bankruptcy is if you still owe the bank something after the foreclosure sale.
Many types of lawsuits aren't dischargeable in bankruptcy. The reason is that the other person lost money as a result of your actions. While you may be financially struggling, not having that money can also cause them financial problems.
If you can't pay a lawsuit, you may be able to look into an alternative payment plan. The court may consider your lawsuit payments when making a plan for your other debts in bankruptcy, but you can't get rid of your lawsuit payment in bankruptcy.
Medical bills are actually a common debt that can be discharged in Chapter 13 bankruptcy. This includes money you owe to medical providers as well as any credit cards or loans you took out to pay your medical costs.
If you owe money to a hospital, you may also want to see if you can qualify for financial assistance that eliminates or reduces what you owe. A bankruptcy attorney can help you with the process and determine which option is right for you.
Like your mortgage lender, your HOA has a right to foreclose on your home if you don't pay HOA dues or other charges. This means you can't get rid of HOA charges in bankruptcy unless the charges are worth more than your home is worth.
If you took on other expenses, like repairs required by your HOA, any related debts might be dischargeable if they're not secured.
To learn more about what types of debts you can get rid of during bankruptcy, contact a local Chapter 13 bankruptcy attorney such as Ozment Law PA today.