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If you are divorced and are filing for bankruptcy claim, you might be thinking whether you will be able to wipe out your obligation of paying community debts. In normal circumstances, it is quite likely that filing the court petition regarding the same will free you from all community debts that are dischargeable. However, in some cases, you may be liable to pay the same even after you have been declared as belly-up under chapter 7 bankruptcy. Therefore, it is important for you to be aware of certain kinds of debts that may or may not be discharged. Always remember, if granted, bankruptcy is going to be there in your financial card for the next 10 years at the very least. Therefore, if you plan everything beforehand, things would definitely be much easier for you.

Filing Petition When A Dissolution Action Is Pending

However, in such cases, you are recommended to discuss the matter with your family law attorney. The attorney is an expert person and they know about the intricacies involved in the laws associated with bankruptcy claim. They will get you the real picture based on your specific circumstances and lots of other factors associated with the same. There can be several implications of filing bankruptcy during the period when a dissolution action, such as a divorce case etc, is pending. Your family law attorney will help you understand those implications and take the right step based on that. What is more, it is also important for you to note that in case the court discharges you from community debts, your spouse will become liable to pay off the entire balance on those debts. In other words, if you file your petition at a time when a dissolution action is pending and community debts are considered as dischargeable debts, the liability will be shifted on to your spouse.

Debts That Can Not Be Discharged In Any Case

Insolvency under this chapter is usually considered as freedom from all kinds of debts. However, there are certain kinds of them that cannot be discharged in any case even after you have won the bankruptcy claim under chapter 7. It depends upon the judgment of the court and your specific circumstances regarding which debts are dischargeable and which ones are not. In normal circumstances, the bankruptcy court considers the following debts as non-dischargeable.

# Penalties and forfeitures,
# Criminal fines,
# Student loans,
# Non-dischargeable debts from a prior bankruptcy,
# Liability for injury or death from driving while intoxicated,
# Debts caused by the malicious or willful misconduct by the debtor,
# Liability associated with spousal and child support, and
# Taxes (except in certain cases).

However, the debtors sometimes are not able to get even the dischargeable debts removed because the creditors have filed an appeal against the same. Still, in usual circumstances, once the debtors win the bankruptcy claim, and the equity interest in the property is exempt, they can retain the property by redemption or reaffirmation.

Filing for bankruptcy claim might be easy, but it is certainly not a simple task to live with the tag of being insolvent for 10 long years. Therefore, if you are filing under chapter 7 bankruptcy, make sure that you are well aware of the ins and outs associated with the same. For example, you must know the outcomes of filing bankruptcy when a dissolution action is pounding.

By Saurabh K Jain

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by Alan Lester van der Reinje

No matter how much we prepare for disasters it never seems to be quite enough. Most people live from paycheck to paycheck and only make the minimum payments on their credit cards or loans. When disaster strikes, such as unforeseen unemployment, many find themselves accumulating debt they cannot pay off. The option of choosing a bankruptcy chapter becomes a pressing decision and one that can change lives.

There is a distinctive difference in bankruptcy chapter 7, 11, and 13. Bankruptcy laws have also changed within recent years so it is especially important to know which changes in law are the most applicable to the given situation. A bankruptcy chapter, regardless of which one, is under the regulation of The United States Bankruptcy Courts and is governed by federal laws determining the rules and guidelines for each bankruptcy chapter.

Chapter 7 bankruptcy is where the individual is unable to pay anything towards his or her creditors. The judge and attorney will compile a list of all debts owed and look at whether or not the individual will be able to pay them back the money that is owed. If the person is not fiscally able to repay the debts then the assets not covered under exemption will be sold or returned and any extra monies paid to the creditors.

Chapter 11 bankruptcy and chapter 13 bankruptcy are where the debtor and his or her attorney makes arrangements through the court system to pay back the debts in monthly installments that will not overburden the individual. There are some assets, such as retirement, that cannot be touched by creditors so this provides some measure of relief for those nearing retirement age who do not want their 401k or retirement saving plans wiped out.

Bankruptcy chapter laws also prohibit certain types of behavior from creditors and collection agencies. These vary slightly from state to state but are generally a list of rules and regulations that prevent collectors from harassing individuals. One provision in bankruptcy chapter laws prevents creditors, after bankruptcy proceedings have been initiated, to contact the individual again directly regarding the debt.

Other bankruptcy chapter laws might cover a debt collector making harassing or threatening statements to an individual, his or her friends and family. There are also laws protecting a person’s place of work from receiving phone calls if it jeopardizes their job.

All of the bankruptcy chapters leave a mark on credit reports. It is one decision that definitely should not be taken lightly. Jobs, cars, bank accounts and even insurance premiums are all affected by bankruptcy. It will not be a permanent mark and there is a chance for a new life if valuable lessons are learned. Overspending must be curtailed and responsibility taken for bills, otherwise the vicious cycle can begin again.

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Bankruptcy is one option to consider in order giving yourself a “fresh start,” when you have more debts than you have assets. There are in fact many types of bankruptcy provided under the law but the most common is Chapter 7 bankruptcy, which is also known as liquidation.

When filing under Chapter 7 bankruptcy, all your assets, excluding those that are exempt under the law of your state, are dissolved and liquidated. Generally, the person tasked to do this is the court-appointed official, called a trustee.

All in all, the vital task of the trustee is selling your properties and using the proceeds to pay your creditors. After doing such, the court will then cancel many of your remaining debts, thus affording you a “fresh start” to life.

Here is a step-by-step guide to filing a bankruptcy under Chapter 7 bankruptcy:

Step 1:

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