More Common Question About Consumer Bankruptcy

We’ve previously discussed common misconceptions about consumer bankruptcy, but many debtors in the Chicago area have additional questions about the effects of personal bankruptcy. For many Illinois debtors, filing for Chapter 7 or Chapter 13 bankruptcy can be a way to ease substantial financial burdens from medical bills and high credit card debt. However, each situation has its own nuances, and it’s very important to discuss your case with an experienced Oak Park bankruptcy attorney.
Given the complexity of bankruptcy law, it’s not surprising that many misconceptions exist about filing for consumer bankruptcy. Here are some frequently asked questions:
If I File for Personal Bankruptcy, Will All of My Debts Get Wiped Away?
First of all, the answer to this question depends on the type of consumer bankruptcy for which you file. One the one hand, if you file for Chapter 7 bankruptcy, then you’ll be eligible to have most, if not all, of your debts discharged. If you file for Chapter 13 bankruptcy, on the other hand, your debts won’t simply be discharged. Rather, your debts will undergo a process of reorganization. A Chicago bankruptcy lawyer can speak with you more about how Chapter 13 bankruptcy works.
At the same time, however, it’s important to remember that filing for Chapter 7 bankruptcy—a form in which most debts are discharged—doesn’t mean that all of your debts will simply go away. It’s much more difficult to discharge student loan debts, and some types of taxes, for instance, cannot be discharged.
If I Max Out My Credit Cards Before Filing, Will Those Debts Be Discharged?
Some Chicago-area consumers believe that, in the weeks and months before they file a bankruptcy petition, they’re free to spend with abandon. However, this isn’t the case. If a court believes you’ve committed fraud, any debts you’ve incurred as a result of that fraud will not be dischargeable.
Can I Discharge Student Loan Debt?
Many consumers have heard that student loan debts aren’t dischargeable. Given that student loan debts now account for the highest amount of debt in our country, it makes sense that consumers would be wondering if filing for bankruptcy could help to manage a substantial amount of student loan debt. In many cases, student loan debt isn’t dischargeable.
However, it’s a common misconception that this type of debt will never be discharged in a bankruptcy proceeding. In fact, if you make an honest attempt to repay your loans, take specific steps before filing, and can prove hardship if you’re required to continue repaying that student loan debt, you may be able to have some or all of that debt discharged. This is a complicated matter that you should always discuss with an experienced Illinois bankruptcy attorney.
Can I Get Fired From My Job if I Declare Bankruptcy?
Some consumers are under the misconception that they can be fired from a job because they’ve filed for personal bankruptcy. In short, an employer cannot fire you because you’ve filed for Chapter 7 or Chapter 13 bankruptcy. On a related note, employers also cannot reduce or salary or penalize you in any way in terms of your employment because of your decision to file for bankruptcy. And in most cases, employers won’t even find out about your bankruptcy filing.
Contact an Experienced Oak Park Bankruptcy Lawyer
Bankruptcy law is extremely complicated, and you should file without seeking advice from an experienced Oak Park bankruptcy lawyer. Contact the Emerson Law Firm today to learn more about how we can assist with your case.
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