Does Debt Bankruptcy Alleviate All Debt?

Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both also provide exemptions that allow you to keep certain assets, although amounts for exemptions do vary. Personal bankruptcy usually does not erase alimony or child support, taxes and fines, or federal student loan debts. Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid debt upon it.

You must also keep in mind that any co-signors become liable for any debts under your umbrella. If this is not what you want, you should second guess filing, or make previous arrangements with the courts for repayment.

Finally, the courts will not accept any pre-meditated, or false debt bankruptcy claims. In fact they take it fairly seriously. Visa states that approximately 30-40 percent of its bankruptcy claims are fraudulent, and they have no problem crying to the courts about it. Paying for a trip around the world on your credit card a couple of months before filing is not that way to go about it.

Debt Bankruptcy is a serious issue, and extensive learning should be done before you even consider going this route for debt relief. You should also be aware that bankruptcy will remain on your credit report for 10 years and when seen by a potential creditor will lower your credit score thereby increasing the chance of higher interest rate. Be aware, and educate yourself, it can never hurt.