Secured Vs Unsecured Debt

Bankruptcy for Secured and Unsecured Loans

Filing Bankruptcy Can Discharge Secured and Unsecured Loans

Before a lender makes the decision to loan money to an individual, they must evaluate a consumer’s credit history. Once the preliminary screening has been done, the lender has a choice to lend to consumers under two main categories: secured and unsecured debt. It is important to understand the differences between secured and unsecured debt if you are planning on applying for a loan, or filing for bankruptcy, so you can understand what financial options are available to you.

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Student Loan Debt Forgiveness

Filing Bankruptcy for Student Loan Debt

Student Loans and Bankruptcy

In Bankruptcy law, there are many myths about what you can and cannot discharge when filing for bankruptcy. One of the biggest myths in bankruptcy today is that when you file for bankruptcy and attempt to have your debt discharged, student loans are impossible to discharge. While student loans are typically exempted from discharge, it is possible to have the Bankruptcy Court make a determination that the student loans pose an undue hardship.

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Can You File Bankruptcy on Taxes Owed

can bankruptcy cover irs taxes

Filing Bankruptcy to Stop the IRS

If you have past due federal taxes and the IRS has begun the collection process, filing for bankruptcy may be a viable option. If you decide to pursue bankruptcy to settle your tax debt, several steps must first be taken.

  1. You you should  file all required tax returns for tax periods ending within four years of your bankruptcy filing.
  2. While your bankruptcy is underway:
    • You must continue to file all necessary returns.
    • You need to pay all current taxes as they are due.

Not all tax debts are dischargeable through bankruptcy. Older income tax obligations with a return due within the past three years are more likely to be discharged. A Chapter 7 bankruptcy wipes out your dischargeable tax debts, with the exception of priority taxes. If you owe priority taxes Chapter 7 bankruptcy will only provide you with temporary relief from IRS collectors while the automatic stay is in effect.
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Top 10 Bankruptcy Myths

  1. People who file for bankruptcy are financially irresponsible.

    FALSE

    • Individuals and corporations file for Chapter 7, Chapter 11, or Chapter 13 bankruptcy for a large variety of reasons.  These reasons are often related to unexpected, and, in many cases, unpreventable, expenses.
    • For example, individuals may need to file bankruptcy due to unexpected medical bills or a sudden death in the family.  Filing for bankruptcy can also often be necessary after a divorce.
    • Corporations may need to file commercial bankruptcy under Chapter 7 or Chapter 11 because one of their largest customers suddenly went out of business or business slowed down due to sudden changes in their industry such as the financial meltdown in 2008.
  2. Bankruptcy discharges all past debts

    FALSE

    • Not all debts are discharged in bankruptcy.  Certain debts receive a priority in bankruptcy proceedings such as: IRS and Franchise Tax Board liens against real property or certain IRS and Franchise Tax Board debt that was incurred within the last 3 years.
    • Other Debts that cannot be discharged include certain claims for past wages owed to employees, domestic support obligations such as alimony and child support, certain fines or penalties owed to the government, and debts related to fraud or other types of wrongdoing.
    • This is not a complete list of all debts that cannot be discharged in bankruptcy.  For specific questions on whether or not a specific debt can be discharged in bankruptcy, speak to a Los Angeles bankruptcy attorney today.

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I was about to lose my home

I hired Ure and his firm when I was about to lose my home to foreclosure. I was scared and did not know what to do, so I finally made an appointment, and after meeting with Mr Ure and Patty I knew from that point on I made the right choice. He helped me with filing for Chapter 13, and Patty will make sure you understand the whole process. Whenever you call with a question either Atty Ure, Patty or Yolanda, will return your call or email that same day. I went there in fear of a bad outcome and left knowing I was going to be alright and in good hands. Give them a call, they are really worth an hour of your time.

– Audrey, Chapter 13 Bankruptcy

Light at the end of the tunnel

We knew nothing about Ch 13 until the Ure Law Firm recommended this path of reorganization. The lawyers Tom Ure & David Shevitz did an expert job in getting our plan certified. As a result this is the first year in a long time that we have not had to use credit to pay our annual federal income and state property taxes. The plan is working and we can now see light at the end of the tunnel.

– Greg, Chapter 13 bankruptcy