Although bankruptcy can eliminate most of your debts, it cannot cure every financial problem. Our Orange County bankruptcy attorneys at Tran Bankruptcy Law explain some of these issues below:
Bankruptcy cannot eliminate certain rights of ‘secured” creditors.
A creditor is “secured” if it has taken a mortgage or other lien on property as collateral for a loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money on the debt if you decide to give back the property. But you generally cannot keep secured property unless you continue to pay the debt.
Bankruptcy cannot discharge types of debts singled out by the Bankruptcy Code.
Bankruptcy cannot discharge some types of debts for public policy reasons. These include debts such as child support, alimony, most student loans, court restitution orders, criminal fines, and most taxes.
Bankruptcy cannot protect cosigners on your debts.
When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.
Bankruptcy cannot discharge debts that arise after filing bankruptcy.
You can only discharge debts incurred prior to filing bankruptcy. You will be liable for any debts incurred thereafter.