Here’s an example showing in a practical way what happens when a creditor objects to the legal write-off of a debt in bankruptcy.
A creditor or a bankruptcy trustee could potentially object to the discharge–legal write-off–of ALL your debts. Very rare, and preventable.
Disputes in bankruptcy court requiring the judge’s resolution may be done so through an adversary proceeding.
File your Chapter 13 “adjustment of debts” case at the right time to include all possible tax debts. Then budget right to prevent new ones.
Don’t jeopardize an indispensable benefit of filing bankruptcy–immediate protection from your creditors.
The “automatic stay” immediately stops most collection actions by most creditors when you file bankruptcy. But here are some key exceptions.
On September 6, 2016 the parent company of 136 ITT Technical Institute branches announced that it was closing. It immediately closed all of its classroom and online instructions across the country. It canceled the academic quarter that was to start on the following Monday, September 12, leaving about 45,000 students scrambling. ITT Tech had two locations in Louisville. One’s … Read More
One example how debts from a vehicle accident, involving possible drunk driving, are handled in bankruptcy.
A bankruptcy trustee would pay your “priority” debts ahead of other debts in an “asset case.” But what happens in a “no asset case”?
Here’s what happens to “priority” debts in an “asset case.”
To the extent you do not pay off your debts during a Chapter 13 payment plan, the remaining balance is usually legally written off forever.
In most straightforward Chapter 7 cases all debts not secured by any collateral are discharged–forever written off. You pay nothing on them.
“Stripping” off a second mortgage has major immediate and long-term benefits.
If one of your creditors is not included in your “schedules” you risk continuing to owe that debt after your bankruptcy is finished.
You can’t legally write off child support or spousal support.