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If a debtor is unable to pay their financial obligations they are said to be "insolvent" or in Insolvency. Debtors can include large corporations, students, homeowners, individuals and governments. Debtors seeking to receive a discharge from the debt may file bankruptcy.

If the debtor meets all of the mandates of the Bankruptcy Code they may be discharged from their debts. Bankruptcy discharges are a legal order from the court which permanently bars a creditor from any further collection efforts including: harassing telephone calls, letters, personal contact or any type of legal debt collection efforts. Certain debts which can not be discharged by bankruptcy are included in 11 U.S.C. Section 523.

2 categories of debt

The most common debts which can not be discharged include: tax debt, debts not listed on the bankruptcy schedules, alimony, child support, student loans, certain HOA housing fees and fines for injury caused by driving while intoxicated. Debts are generally divided into two categories- secured debt and unsecured debt. Secured Debt is secured or collateralized by property or something tangible which can be repossessed by the creditor if the debtor defaults on their debt payments. Common secured debt includes home mortgages, car loans and jewelry. Debtors also may have unsecured debts which are not secured by an asset. Creditors incur a higher risk lending money to debtors which is not secured by assets. Unsecured debt can include credit card debt and personal loans. Creditors generally charge a high interest rate to debtors who borrow unsecured credit.

More Help on Debtor

  • Creditor - Creditors can include businesses, individuals, organizations or the United State\'s government who is owed money for services or products provided to a second party in return for payment. - read more

  • Insolvency - Insolvency occurs if the debts and liabilities a company owes are greater than the company\'s assets or cash flow. - read more

  • Secured Debt - Secured debt is any type of debt which is backed by collateral or something of value which can guarantee the secured lender that the amount of the loan can be repaid or the item of value can be repossessed to pay the loan. - read more

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Chapter 7 and Chapter 13 Bankruptcy Help

The two most common consumer bankruptcies are Chapter 7 and Chapter 13, our sponsoring lawyers handle these types exclusively so you can be sure you are getting accurate legal advice when you file bankruptcy. Our Bankruptcy attorneys will fight to protect your rights and your property, fight the aggressive and annoying creditors for you, and they can help you keep your home, vehicles and other property.

A lawyer will be committed to getting you debt relief and providing you with valuable information, services and advice to get you a better financial future. There are many convenient locations to make filing bankruptcy or learning about the alternatives we offer, even easier.

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