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If you are putting a significant portion of every paycheck toward your debt and still not making a dent in it, you may be considering filing for bankruptcy. Although declaring bankruptcy is an effective strategy for regaining your financial footing, it is not applicable in all situations. The staff at Sam Turco Law Offices in Omaha and Lincoln, NE, explains how to determine if your debt is dischargeable.

Can I Discharge My Debt by Declaring Bankruptcy?

Eligible Debts

In general, bankruptcy is an effective financial tool for discharging excessive amounts of unsecured debt. This includes credit card debt, personal loans, and medical bills. Chapter 7 bankruptcy will also eliminate collection agency accounts, past due utility bills, and auto accident claims that do not involve drunk driving. If you file for Chapter 13 bankruptcy, it will reorganize your unsecured debt into a more manageable payment plan. Any eligible debt left over after you have completed the financial arrangement will then be discharged.

Ineligible Debts

bankruptcyUnfortunately, you cannot discharge certain kinds of debt by declaring bankruptcy, regardless of how much you might be struggling financially. Some examples of nondischargeable debts are child support obligations, alimony, most tax debts, most student loans, and fines you incurred for violating the law; however, if you have a significant amount of nondischargeable debt, you may still benefit from filing for bankruptcy. By filing, you can effectively eliminate your credit card debt, for example, allowing you to put more of each paycheck toward your tax or child support obligations.

If you are considering filing for bankruptcy and you have a combination of dischargeable and nondischargeable debts, an attorney from Sam Turco Law Offices can assess your financial situation and help you determine the best way to proceed. Visit their website to learn more about the compassionate attorneys at their firm, and call (402) 614-7171 to schedule a free initial consultation in Omaha or Lincoln today.

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