Being overwhelmed by debt can be highly distressing and frustrating. Watching month after month as you don’t have enough money to make ends meet can be suffocating and could even affect your mental health in the long run. Faced with such a challenging situation, you’re bound to start looking for ways to get rid of your debts. Eventually, you’ll find that bankruptcy is one of the most effective methods to do so.

Contrary to popular belief, bankruptcy is not an entirely negative process. On the contrary, it is a legal option that will eliminate most of your debts and give you a fresh financial start.

However, bankruptcy won’t be the solution to all your problems. Before you start the process, you should know what bankruptcy can and cannot do. This way, you will know what to expect from your filing, and you will be able to prepare yourself for life after bankruptcy.

 What bankruptcy can do

Bankruptcy is a powerful remedy for people who are struggling with debt. The process eliminates most debts for filers, allowing them to rebuild their finances from the ground up.

The two most popular and well-known personal bankruptcy Chapters are Chapter 7 and Chapter 13. Although they share many similarities, each one offers different benefits.

 If you want to know which bankruptcy Chapter is right for you, you should schedule a free consultation with a Los Angeles bankruptcy attorney, such as KT Bankruptcy Lawyer. The attorney will evaluate your financial situation and guide you to a fresh financial start every step of the way.

       Stop creditor harassment

Bankruptcy can help you stop the calls, visits, and general harassment from your creditors. Once you file your case with the bankruptcy court, you’ll be protected by the automatic stay. As a result, your creditors will be legally obligated to stop any debt collection activity immediately. This includes lawsuits, wage garnishments, and more. Now you will have the opportunity to get back on your feet and regain your peace of mind.

       Stop foreclosure, eviction, and repossession

If you are about to deal with any of these processes, bankruptcy may be able to help you stop them (at least temporarily). However, bankruptcy won’t help you if they have already been completed. 


If your landlord is about to evict you, the automatic bankruptcy stay may help you stop the process. If the eviction is still in litigation at the time of your filing, it will be considered a debt collection action and will be stayed. This will give you the time you need to negotiate a new agreement with your tenant or reorganize your finances to pay your rent.


If you are facing foreclosure, bankruptcy can help. The automatic stay will stop the process for a while. However, keep in mind that under Chapter 7, you may not be able to keep the property.  This type of bankruptcy will only give you more time to find another home or renegotiate the terms of your mortgage.


Repossessions stop automatically when you file for bankruptcy. Likewise, Chapter 7 won’t help you keep the asset permanently. If you want to keep your home or car, Chapter 13 bankruptcy may be your best option. 

       Eliminate most of your unsecured debts

The main benefit of bankruptcy is to eliminate most of your unsecured debts. This includes medical expenses, credit card debt, personal loans, and much more.

In essence, if you didn’t promise to return the asset you purchased if you didn’t pay the bill, the debt is unsecured.

       Eliminate  some secured debts

If you are willing to give up the asset you acquired by way of a secured loan, such as a car, house, or computer, you may be able to erase the debt through bankruptcy.

If you want to read more about the benefits of bankruptcy, consider visiting At Legal Facts, you can also connect with a bankruptcy lawyer near you, ready to answer all your questions.  Learn how to make the most of your bankruptcy discharge with the help of an attorney; you have nothing to lose.

What only chapter 13 bankruptcy can do

There are certain benefits that only Chapter 13 bankruptcy can offer you. Also known as “wage earner’s bankruptcy,” you will need to restructure your finances in this Chapter. Then, you will have to repay some of your debts through a 3- or 5-year repayment plan. Any unsecured debts that remain after completing your plan will be discharged.

If you want to find out if this is your ideal option, talk to a Los Angeles Chapter 13 bankruptcy attorney. The attorney will help you develop a repayment plan that fits your income and will advise you at all times.

       Stop a mortgage foreclosure

Just as in Chapter 7, you will be protected under the automatic stay after filing your case in bankruptcy court. However, there is one crucial difference: Chapter 13 bankruptcy can help you keep your home and other vital assets. Your creditor will be required to agree to a payment plan that allows you to catch up on missed payments over some time.

       Keep non-exempt property

In Chapter 7 bankruptcy, you are required to sell your non-exempt assets to pay off your creditors. On the other hand, this is not the case in Chapter 13 bankruptcy. This Chapter allows you to keep all of your assets, even if they don’t fall under your bankruptcy exemptions. As long as you comply thoroughly with your repayment plan, you will be able to keep them.

       Cramdown secured debts

Chapter 13 also allows you to “cramdown” some of your secured debts to reduce their value in your repayment plan. For example, if you owe $20,000 on a car loan, but the vehicle is only worth $10,000, you can propose to repay the car’s actual value and discharge the rest of the debt. However, if you purchased the car 30 months before your bankruptcy filing, you may not be able to cramdown the debt.

What bankruptcy cannot do

Bankruptcy may be helpful, but it won’t magically cure all your debt problems. There are certain things that bankruptcy cannot do for you, and you should be aware of them before you start the process.

       Prevent a creditor from repossessing a secured asset

Bankruptcy can help you eliminate your debts, but it won’t eliminate liens. A lien allows the creditor to repossess an asset if you cannot pay the debt. If you have secured debt, bankruptcy will relieve you of the obligation to pay it, but the creditor will repossess the asset. However, Chapter 13 bankruptcy can help you keep secured assets through the repayment plan.

       Eliminate child support and alimony

Whatever you do, child support and alimony will survive bankruptcy. You will have to pay these debts no matter what; bankruptcy is irrelevant when it comes to them. The best thing you can do is to include them in your Chapter 13 bankruptcy repayment plan to alleviate some of the burden.

       Discharge student debt

In theory, you could discharge student debt through bankruptcy. But to do so, you must prove that paying it would cause you undue hardship. In other words, you must prove that you currently cannot pay the debt and that you won’t be able to do so in the future either. This is extremely difficult to do. Therefore, in most cases, bankruptcy cannot eliminate student debt.

       Discharge most tax debts

Some taxes can be eliminated through bankruptcy, but it’s not easy. The requirements for wiping out tax debts are stringent. Generally, debts such as trust fund taxes, sales taxes, and income taxes less than three years old cannot be discharged.

       Eliminate non-dischargeable debts

       You won’t be able to discharge these debts in any chapter of bankruptcy:

  •       Debts you do not list in your bankruptcy filing. (This may vary if you have a no-asset case).
  •       Obligations related to personal injury claims settlements.
  •       Fines imposed for violating the law.

In Chapter 7, these debts will survive your filing. And in Chapter 13, they will be included in your repayment plan. However, if you fail to repay them within the plan’s duration, they will prevail even after your debt discharge.

How can I find the right bankruptcy attorney for my case?

Filing for bankruptcy without an attorney may be a bad idea. The bankruptcy process is often very confusing for those unfamiliar with it. As a result, those who proceed without an attorney often fail to file and end up having more problems than before.

Luckily, finding the perfect attorney for your case has never been easier. With a quick Google or Bing search, you’ll find many experienced local attorneys ready to help you get rid of your debts.

Then, it’s up to you to choose the best Tulsa bankruptcy lawyer for your case. Make a shortlist of candidates, and use the free initial consultation to determine who you want to work with.

Now, lawyers who appear at the top of the most popular search engine results are usually reliable and professional. This is because they are willing to invest in Law Firm SEO agencies to boost their online rankings and reach more clients.

If you are a modern lawyer, this Law firm SEO company might be able to help you connect with more potential clients – don’t miss this opportunity!

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