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    Bankruptcy Discharge

    Your Rights – Making the Most of Your Bankruptcy Discharge

    The Law Offices of Kristy Qiu, P.A. assists the residents of Fort Lauderdale to acquire a Bankruptcy Discharge.  A discharge is when a person is released from the responsibility to pay their outstanding debts to creditors.  Because of the many different types of debt that may be excluded from discharge, it is important to consult an experienced Ft. Lauderdale bankruptcy attorney who can assure you discharge as much debt as possible.

    Help-Bankruptcy-Miami-Broward4-1024x203

    Below please find various answers to the most frequently asked bankruptcy discharge questions.

    1. About Bankruptcy

    Bankruptcy is a choice that may help if you are facing serious financial problems. You may be able to cancel your debts, stop collection calls, and get a fresh financial start.  Bankruptcy can help with some financial problems but does not guarantee you will avoid financial problems in the future. If you choose bankruptcy, you should take advantage of the fresh start it offers and then make careful decisions about future borrowing and credit, so you won’t ever need to file bankruptcy again!

    2. How Long Will Bankruptcy Stay on My Credit Report?

    The results of your bankruptcy case will be part of your credit record for ten (10) years. The ten years are counted from the date you filed your bankruptcy.

    This does not mean you can’t get a house, a car, a loan, or a credit card for ten years. In fact, you can probably get credit even before your bankruptcy is over! The question is, how much interest and fees will you have to pay? And, can you afford your monthly payments, so you don’t begin a new cycle of painful financial problems?

    Debts discharged in your bankruptcy should be listed on your credit report as having a zero balance, meaning you do not own anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult to get credit. You should check your credit report after your bankruptcy discharge and file a dispute with the credit reporting agency if this information is not correct.

    3. Which Debts Do I Still Owe After Bankruptcy?

    When your bankruptcy is completed, many of your debts are “discharged.” This means they are canceled and you are no longer legally obligated to pay them.  However, certain types of debts are NOT discharged in bankruptcy. The following debts are among the debts that generally may not be canceled by bankruptcy:

    • Alimony, maintenance, or support for a spouse or children.
    • Student loans. Almost no student loans are canceled by bankruptcy. But you can ask the court to discharge the loans if you can prove that paying them is an “undue hardship.” The burden to demonstrate undue hardship will be on you. Courts vary in opinion, but they often apply a stringent three-part test to determine whether an undue hardship is present:
    1. Income: If after you will not be able to maintain a minimum standard of living for yourself and/or your dependents after paying off the student loans. The minimum standard of living is objective, it’s mostly confined to food, clothing, and other basic necessities. It is subjective according to what you are used to prior to filing for bankruptcy. It is very hard to meet this element of the three-part test.
    2. Duration: If the financial situation that satisfies the income element will continue for a significantly long period of time – often decades.
    3. Good faith: You must have made a good faith effort to repay the loan prior to filing bankruptcy.

    Occasionally, student loans can be canceled for reasons not related to your bankruptcy when, for example, the school closed before you completed the program or if you have become disabled. There are also many options for reducing your monthly payments on student loans, even if you can’t discharge them.

    • Money borrowed by fraud or false pretenses. A creditor may try to prove in court during your bankruptcy case that you lied or defrauded them so that your debt cannot be discharged. A few creditors (mainly credit card companies) accuse debtors of fraud even when they have done nothing wrong. Their goal is to scare honest families so that they agree to reaffirm the debt. You should never agree to reaffirm a debt if you have done nothing wrong. If the company files a fraud case and you win, the court may order the company to pay your lawyer’s fees.
    • Most taxes. The vast majority of tax debts can not be discharged. However, this can be a complicated issue.  If you have tax debts you will need to discuss them with your lawyer.
    • Most criminal fines, penalties and restitution orders.  This exception includes even minor fines, including traffic tickets.
    • Drunk driving injury claims.

    4. Do I Still Owe Secured Debts (Mortgages, Car Loans) After Bankruptcy?

    Yes and No. The term “secured debt” applies when you give the lender a mortgage, deed of trust, or lien on the property as collateral for a loan. The most common types of secured debts are home mortgages and car loans. The treatment of secured debts after bankruptcy can be confusing.

    Bankruptcy cancels your personal legal obligation to pay a debt, even a secured debt. This means the secured creditor can’t sue you after a bankruptcy to collect the money you owe. BUT, the creditor can still take back their collateral if you don’t pay the debt. For example, if you are behind on a car loan or home mortgage, the creditor can ask the bankruptcy court for permission to repossess your car or foreclose on your home. Or the creditor can just wait until your bankruptcy is over and then do so. Although a secured creditor can’t sue you if you don’t pay, that creditor can usually take back the collateral.

    For this reason, if you want to keep property that is collateral for a secured debt, you will need to catch up on the payments and co