What is Shoreline bankruptcy August 8, 2010

Shoreline bankruptcy is a federal court case that cancels your debt with a final order called a “discharge”.  The discharge is an injunction against creditors ever collecting a debt from you again.  If they violate the discharge, they can be sanctioned by the federal courts.  The idea is to provide the honest, unfortunate debtor with a financial fresh start when a debt load gets so burdensome that it interferes with someone’s dignity and ability to be a productive citizen.

Some debts cannot be discharged – such as student loans, back taxes, back child support and fines.  Though most debt can be discharged, you should consult an attorney to discuss which of your debts can be wiped out in a Shoreline bankruptcy.  Often, you can keep you car, your house or other things you are making payments on in a Shoreline bankruptcy.

There are two types of Shoreline bankruptcy for most consumers – Chapter 7 and Chapter 13.  A Chapter 7 is an easier, cheaper form of Shoreline bankruptcy.  The whole process usually takes just over three months.  Though most property can be protected in a Chapter 7, there is a risk of having some of your property sold to pay part of your debts.  If you make over the average income, you may have to file a Chapter 13 Shoreline bankruptcy.

A Chapter 13 is a three to five year repayment plan.  It can be a great way to protect yourself from foreclosure, the IRS, license suspensions, paying your ex-spouses debts, car repossessions and having your assets taken.  Even if you have a high income and must pay back all your debts, at least a Chapter 13 offers legal certainty and a specific date when you know you will be out of debt.