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When your debts are piling up and you lack the ability to make your payments while still supporting your family, it may be time to speak with a bankruptcy lawyer about your options. Bankruptcy is rarely an easy process for debtors, but it is an effective way to discharge debts and get a fresh financial start. Be sure to tell your bankruptcy attorney about all of your liabilities, including civil judgments, wage garnishments, and property liens. Your bankruptcy lawyer will let you know whether your particular judgment should be discharged in bankruptcy.

Automatic Stay

As soon as your lawyer files the bankruptcy petition on your behalf, an automatic stay goes into effect. The automatic stay prohibits all creditors from taking any collections actions against you. This means that if your paycheck had been subject to wage garnishments to satisfy a judgment, these deductions will be placed on hold. If your civil lawsuit is still pending, the automatic stay will hold it in abeyance.

Bankruptcy Discharge

Bankruptcy debtors most often have judgments that involve unpaid debts, such as medical debt or personal loans. These types of debts are dischargeable in bankruptcy, which means that a judgment for these types of debts is also dischargeable.

Discharge Exceptions

Your bankruptcy lawyer will determine whether your particular judgment is dischargeable or not. There are some exceptions. Some common types of non-dischargeable debts include alimony and child support arrears, tax debt, student loans, and criminal penalties, fines, and restitution. Judgments issued as a result of a jury award or settlement for a personal injury lawsuit might also not be dischargeable in certain cases, including wrongful death due to drunk driving or willful injury.

Property Liens

Your lawyer will need to know if you have any liens against your property. Even if your liability is eliminated for a dischargeable judgment, the lien might remain. Filing for bankruptcy does not automatically eliminate property liens; you’ll need to file a motion to remove it.

Every debtor’s financial situation involves unique issues. At Cutler & Associates, Ltd., our bankruptcy attorneys in Schaumburg will thoroughly evaluate your case and explain the outcome you can likely expect.