When someone files for bankruptcy under Chapter 7 in Topeka KS, most debts are discharged after a certain amount of the person’s assets are distributed to pay as much as possible. Not all debts can be discharged through bankruptcy, and the person is not required to give up every asset. Some types of property are exempt by law.
Unsecured Debts
Most unsecured debts, or those that have no type of collateral, are essentially forgiven. That includes obligations like credit cards, medical bills and installment loans. This is what most people who file for Chapter 7 in Topeka KS are struggling with.
Filing for Chapter 7 does not eliminate some obligations. Requirements to pay spousal or child support must continue to be met. Student loans cannot be discharged through bankruptcy.
Secured Debts
Examples of secured debts include car loans and mortgages. If the individual cannot afford to catch up on missed payments and continue with the payment schedule, the property generally must be given up. Bankruptcy does not wipe out the remainder of the loan.
Property Exemptions
Exemptions for property vary by state. In Kansas, a person filing for bankruptcy can keep his or her primary home if there is no mortgage on it. However, only one acre of land can be kept unless the homestead is a farm.
This person also can keep a vehicle if it is necessary to get to work if is not being financed and is not worth more than $20,000. Household furnishings and clothing do not have to be liquidated, but the individual is expected to surrender jewelry in excess of $1,000 in value. A person filing for Chapter 7 with the assistance of a lawyer such as Business Name will want to ask about exemptions regarding pensions and retirement plans.
Responsibilities of Spouses and Ex-Spouses
There are complicated factors involving marriage and divorce in regard to bankruptcy, which a lawyer can explain in detail. For example, sometimes only one spouse files, but this will affect the other spouse in regard to co-owned property. Filing can even affect an ex-spouse in regard to credit card debt that was accumulated during the marriage.
