Debt Treatment 

Treatment of debt in bankruptcy in San Diego depends upon the nature of the obligation and when the obligation was incurred.  Different types of debts are treated differently.  When the obligation is incurred, may also affect your ability to discharge it when you file your case.

How Debts are Treated in Bankruptcy San Diego

While we can give you a general idea of how debts are treated and what debts you can eliminate in bankruptcy, reading information on a web site is never a substitute for detailed analysis by an experienced lawyer.  With that caution in mind, in most cases, with the help of an experienced attorney, you can:

            •   File bankruptcy on credit cards and related collection accounts.

            •   File bankruptcy on medical bills and medical collection accounts.

            •   File on a home loan, and still keep a home in bankruptcy.

            •   File on a line of credit, and still keep your home.

            •   File bankruptcy on HOA dues and HOA fees assessed before you file.

            •   File on a car loan, and still keep your car in bankruptcy.

            •   File on a car lease, and continue to drive your leased car.

            •   File after foreclosure, and get rid of your home loan balance.

            •   File bankruptcy on taxes, if they are older taxes.

            •   File bankruptcy on 1099C tax liability for canceled debt.

            •   File bankruptcy on a judgment and stop all judgment collection activity. 

What You Usually Can't Include

There are a few different types of debts that you usually cannot include in a bankruptcy filing.  Perhaps the most notable are student loans, which are almost never eliminated, child support and alimony, which is not eliminated.

When the Obligation Was Incurred

Debt treatment can depend on when the financial obligation was incurred.  If you have recently incurred new financial obligations, your creditor could allege that you incurred the debt through fraud in that you had no intention of repaying the debt then you incurred it.  Incurring a debt without an intention to repay it is a legal form of fraud under the law.  If your creditor can show this type of fraud, the debt will not be eliminated.

In San Diego, creditors do not file fraud actions very often, absent a large balance owing or clear and convincing evidence of fraud.  If you have recently incurred new credit cards or other debts, be sure to discuss this in detail with your lawyer to prevent an allegation of fraud in your case.  Fraud, in a legal sense, includes making a promise to repay a credit card or loan or other debt when in reality you did not intend to repay it.

Get Out of Debt

How your debt will be treated in bankruptcy is a very important consideration in determining whether your Chapter 7 or Chapter 13 filing will truly help you get out of debt and get a fresh start for you and your family.

Call us today and talk to an experienced lawyer to learn how your particular debts will be treated in bankruptcy.  Once you have a more clear understanding of what you can and cannot eliminate,  you will be able to make an informed decision and move forward with the recommendation of your lawyer.