The main reason a lot of people are filing for bankruptcy is because it releases them from any debts they might be in, though this frees you of debt it does not free you from it all, there are certain types of debt that bankruptcy cannot get rid of. Before you file for bankruptcy you need to make sure which debts it will actually clear and which ones it will leave behind.
Which Debts Will Get Cleared By Bankruptcy And Which Ones Won't?
The debts it may not clear are as follows; secured debts, child support, most tax debts, alimony and student loans. All other debts such as credit cards, mortgages and other loans can be cleared by declaring yourself bankrupt.
The main goal of going bankrupt is to clear all unsecured debts, if you have a lien on your house this may still stand after declaring yourself bankrupt as the lien will survive and you will still need to cough up for that.
I Know Someone That Cleared Their Student Loan By Bankruptcy
Yes, you may know someone that has declared bankruptcy and their student loan was cleared. If you live within the US, president Obama passed a new law which gives federal government control over the student loan. This means it is much harder to get rid of the debt, it is possible but not easy to do.
The Loopholes To Get Rid Of Student Debt Via Bankruptcy
Yes! Loopholes do exist and it does not cost much to use the holes to get rid of ones student debt by using the bankruptcy route. Though there is a catch and this means devoting your soul to "Bid Daddy", the government.
According to the law passed, the judge has the discretion to get rid of any debts and judgements if the case is sufficient enough to call for an adversary proceeding. In this case proceeding the judge can look at your claims and reasons as to why you need to eradicate your student debt. But doing this you must prove you have the correct ground and circumstances which make it impossible to pay this debt off. One of the reasons you could use is the mental illness act. You must prove you have a mental or physical illness that would prevent you paying off the debt to the creditors.
Is It The Best POA (Plan Of Action)?
Well, look at it this way…. once you have been found mentally unstable or physically unfit, you will be placed in a huge database along with other people who have now have limited rights and other liberties taken away. Some of these reasons include, not being able to own a gun and being forced (in some cases) to consume prescription medicine.
I know what many of you are probably thinking, “well they wanted the loan to go to University, they should pay it!” Well yes, this is very true but some people really do have a problem and can’t pay the debt off. Therefore they look towards other ways such as this to help them. Below are 11 alternatives you can use to get the adversary proceeding rolling, check it out and see what you can do to get the debt removed.
Luke writes for a Birmingham accountants firm and has extensive knowledge on law and accountancy practices. He is also a former writer and editor for the daily star.