Contrary to popular belief, there is no minimum amount of debt required to file for bankruptcy. You don’t need to wait until you have an overwhelming amount of debt to act on your unpaid bills and expenses. Before you make any major decisions, here are some things to consider before filing for bankruptcy:
What Cannot Be Discharged Through Bankruptcy
Before continuing, not every kind of debt can be absolved by bankruptcy.
These are some of the debts that cannot be discharged:
- Fines or penalties owed to government agencies (traffic tickets, criminal fines, licensing fines, jury fees, etc.)
- Alimony (spousal support) or child support
- Personal Injury debts from accidents, such as drunk driving
- Certain kinds of property or income tax
- Loans from retirement plans
How Much Debt Do You Have?
After figuring out what you can and cannot get discharged from bankruptcy, the next step is acknowledging how much debt you have.
Here are some important questions to ask yourself when considering bankruptcy:
- Can you repay your debt without bankruptcy? If there is a way to pay your debts without jumping through the hoops of going through bankruptcy, you may want to consider it. There are debt alternatives to bankruptcy that can also help you achieve financial relief.
- Are creditors willing to negotiate with you on your settlements? If your creditors are willing to work with you on your debt, you may be able to avoid bankruptcy.
- Are the debts you want to absolve eligible for discharge? Making sure your debts are eligible for a discharge is key before you make any decisions to try and eliminate them.
Mortgage Debt Relief During COVID
While we are currently in an international health crisis, there are many people who have been struggling to pay rent or their mortgage. Fortunately, if this is you, there are a few ways in which to gain relief instead of having to file bankruptcy.
- Your lender or loan servicer is not allowed to foreclose you until at least August 31, 2020, under the CARES Act.
- If you have been experiencing financial hardship due to the pandemic, you have the right to request and obtain a forbearance (when your mortgage servicer temporarily pauses or reduces your mortgage payments) for up to another 180 days without any additional fees.
- Lastly, you may be able to obtain a loan modification to lower your monthly payments if you have experienced a permanent impact on your ability to pay your mortgage.
Call Our Indianapolis Bankruptcy Lawyers Today!
Filing for bankruptcy can be a tough decision to make. At Jackson & Oglesby Law LLC, our compassionate attorneys have the experience you need to help make the best-informed decision for your financial situation. We are dedicated to providing the best possible direction, and our experienced representation on your behalf.