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WHAT IS
BANKRUPTCY
ALL ABOUT?
Bankruptcy can be a fresh financial start. It is designed to help those who are in debt beyond a reasonable means to repay.There are consequences to filing bankruptcy, such as long-term damage to your creditand a reduced ability to make major purchases on credit, such as a home, car, etc. for a period of time. However, if your debt problem is overwhelming, bankruptcy is a legaland, for many, a sound financial choice.The law states that a person is entitled to start over financially so long as they havenot been dishonest in getting into debt. Bankruptcy will wipe out all of your unsecured debts and let you keep most, if not all, of your property.People get in over their head financially for many reasons: loss of employment, cut inhours or pay, business failure. Most people would avoid bankruptcy if they could, butlike many things in life, sometimes bankruptcy just cannot be avoided.While it is not easy to make the decision to file bankruptcy, you will survive. Over one million Americans survive bankruptcy every year. The qualified BankruptcyParalegals at Attorney Alternative will help you get through the process, and willshow you ways to re-establish your credit after filing.Debt causes all type of problems: health, marital, physiological, work related and self esteem. In fact a recent medical study conducted by a major university shows thathigh debt causes health problems. While bankruptcy is not a medical treatment, whenyour finances are back on the mend, your stress level may become manageable again.And no more calls from those aggressive collection agencies!
TYPES OF BANKRUPTCIES
Chapter 7: LiquidationChapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Under Chapter 7, you may claim certain property exempt(that is, you can keep the property) and a trustee may take possession of the remainingassets in order to liquidate them and pay your creditors according to priorities set forthin the Bankruptcy Code. In most cases, the debtor does not lose any property.Chapter 13: Repayment of DebtChapter 13 is designed for individuals who are temporarily unable to pay their debts, but would like to pay them in installments over a period of time.
 
Chapter 11: ReorganizationChapter 11 is designed primarily for the reorganization of a business. Its provisionsare very complex and should be done only after consulting an attorney.
TYPES OF DEBT THAT CAN BE DISCHARGED IN BANKRUPTCY
• Almost all unsecured debt can be discharged in bankruptcy.• Secured debt (debt in which some collateral has been posted) is not discharged in bankruptcy, unless the collateral is surrendered. If the collateral is surrendered, thedeficiency balance (the amount that is owed after the creditor sells the collateral)would become unsecured and discharged in your bankruptcy.• A discharge of a deficiency balance only occurs if you have not signed areaffirmation agreement (an agreement to repay the debt).• Debts that were incurred by fraud or as a result of drunk driving are not dischargedin bankruptcy.• Depending on the taxes, personal income tax may be dischargeable in bankruptcy.• Property settlement agreements may be discharged in bankruptcy.• Student loans are not dischargeable in bankruptcy, except in cases where it wouldcreate an extreme hardship on the debtor to pay back the student loan.• Child and spousal support are
not 
discharged in bankruptcy.
Frequently Asked Questions (FAQ)
WHAT CAN YOU KEEP IN BANKRUPTCY?CAN TAXES BE DISCHARGED?CAN STUDENT LOANS BE DISCHARGED?CAN CHILD AND SPOUSAL SUPPORT BE DISCHARGED?CAN PROPERTY SETTLEMENT AGREEMENTS BE DISCHARGED?WHO SHOULD CONSIDER BANKRUPTCY?
 
WILL MY CREDIT BE RUINED?CAN I FILE BANKRUPTCY AGAIN? 
WHAT CAN YOU KEEP IN BANKRUPTCY?
 Most people do not lose any of their belongings in bankruptcy. The end goal of  bankruptcy is to get you back on your feet financially. Therefore, your basicnecessities are protected in bankruptcy, so as to help you re-establish yourself.The equity in your home and most of your personal belongings will, in all likelihood, be protected in bankruptcy.The exemptions (the bankruptcy law which protects your assets) are very complicatedand you should consult an attorney to maximize the protection that you are affordedunder Bankruptcy Law.
CAN TAXES BE DISCHARGED?
Contrary to common belief, income taxes can be discharged in bankruptcy providedthat:• The taxes are at least three years old.• The tax returns must have been actually filed at least two years ago.• Any assessment was more than 240 days ago.• The debtor did not engage in any type of fraud or tax evasion.
CAN STUDENT LOANS BE DISCHARGED?
Student loans are not dischargeable in bankruptcy, except in cases where it wouldcreate an extreme hardship on the debtor to pay back the student loan.
CAN CHILD AND SPOUSAL SUPPORT BE DISCHARGED?
  No.
CAN PROPERTY SETTLEMENT AGREEMENTS BE DISCHARGED?
There is a possibility that a property settlement agreement can be discharged in bankruptcy. The law in this area is somewhat unsettled, however an attorney could
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