How Bankruptcy Affects Debts and Lawsuits
Lawyers Serving Dallas-Ft. Worth, Austin and Houston, Texas
Filing for bankruptcy can be a very smart move if you are facing many debts and lawsuits. Bankruptcy either defers debts, puts you on a payment plan you can handle, or gets rid of them entirely. And all lawsuits related to debts must be put on hold as soon as you file.
Bankruptcy law is complex, and it has different implications for each type of debt and lawsuit. Below are just a few examples of what a bankruptcy can do. For more information about any of the below or any other types of debt, feel free to contact one of our attorneys.
While you are in bankruptcy, student loans are often deferred until the bankruptcy is complete. Once the bankruptcy proceedings are over, you will have to start paying student loans again. If you undergo a Chapter 13 bankruptcy, you might be making some payments, but they will be smaller than your current payments.
Alimony and Child Support
You can avoid garnishment of wages for alimony or child support by filing for a Chapter 13 bankruptcy. The bankruptcy proceedings will allow you to get current at a pace you can handle. But you will not be able to discharge alimony or child support at the end of a bankruptcy.
Many people will tell you that tax debt is the toughest type of debt to discharge through bankruptcy. But there are many circumstances in which they can be wiped away. For example, our attorneys can often eliminate tax debt over 3 years old through a Chapter 7 bankruptcy and eliminate tax debt less than 3 years old through a Chapter 13.