Is it possible to file for bankruptcy after paying off your debts?
If you have already paid off your debts and are still struggling, you may be wondering if you should file for bankruptcy. Bankruptcy is a legal option, and you can keep certain types of debts even after filing. Here are some things to keep in mind before making this decision.
Chapter 7 bankruptcy
If you are in serious debt and are considering Chapter 7 bankruptcy, it is important to know what you can expect from the process. Although filing for bankruptcy isn't free and it is not a quick solution, it can help you get out of debt and avoid filing again. There are some important things to remember, however, and here are some tips to follow.
First, you must be able to pay the court's filing fees. Chapter 7 bankruptcy is less expensive than filing for Chapter 13 bankruptcy, and the process does not take a long time. Usually, your debts are cleared within four to six months of filing. The filing fee for Chapter 7 bankruptcy does not include attorney fees. You will only make one trip to the courthouse to file. Additionally, you will need to pass a means test to qualify.
Another important thing to keep in mind is that bankruptcy will not wipe out all of your debts. In particular, it will not discharge back child support or alimony obligations. Additionally, it will not wipe out any liens or unsecured debts. If you're considering filing for Chapter 7 bankruptcy after paying off your debts, you should know what not to include in your application.
Whether you should file for bankruptcy after paying off debts
One of the first things you need to do when considering bankruptcy is to stop taking on more debt. Bankruptcy creates a debt repayment plan, typically over a five-year period. But before you can begin the process, you need to gather all the necessary documents. This includes credit counseling. The fee for this is typically under $50, and you may even be able to get a fee waiver.
You'll need to have a clear picture of your finances to decide if bankruptcy is right for you. Depending on your situation, you may be able to keep more of your assets than you think. You can also seek help from a bankruptcy lawyer or credit-counseling agency. You can find federally-approved agencies at the U.S. Department of Justice. Another option is to hire a financial advisor to create a budget that you can afford.
Bankruptcy is a good solution if you can't make payments on time, and if your debts are more than half of your income. However, it should only be considered a last resort. Bankruptcy has serious financial consequences and can take years to recover from. In addition, bankruptcy requires a great deal of paperwork. Even if you are able to manage the paperwork, mistakes can still result in your case being dismissed. This will damage your credit scores and make it more difficult for you to get a job in the future.
Whether you can discharge certain types of debts in bankruptcy
There are several types of debt that are not dischargeable when you file for bankruptcy. Some of these types are tax debts, support obligations, and spousal support arrearages. These types of debts have priority over other types of debt, and you must make them at least in full to avoid bankruptcy. You can also ask the IRS for an installment agreement or a payment plan, which will allow you to pay more over time. Other types of debts can be nondischargeable, but only if the creditor proves that you committed fraud or a fraudulent act.
When you file for bankruptcy, you should ensure that you keep all of your documentation and records of your debts. This is important in case a creditor objects to your bankruptcy filing. Also, avoid lying about when you filed your bankruptcy. If you lied about the date you filed for bankruptcy, the creditor will be able to file a lawsuit against you and stop the bankruptcy process. You should also avoid taking out debt before you file for bankruptcy.
If you have any questions, you can get a free consultation with Ascent Law LLC:
Ascent Law LLC:
8833 South Redwood RoadSuite C
West Jordan, UT 84088
(801) 676-5506
