Debt resulting from divorce is dischargeable under Chapter 7

After a Rockland County divorce, many people find themselves struggling with debt and the aftermath of their decision for years to come. One of the biggest concerns many people have comes after they choose to file a Chapter 7 bankruptcy petition, especially if they have also held a mortgage in the past with their former spouse. It’s not unusual for one spouse to sign over rights to a deed during a divorce. This does not automatically let him or her off the hook when it comes to paying the debt, even if a divorce decree specifies a responsible party. The lender can ultimately hold both parties responsible for payment; however, the individual who no longer has an interest in the property does have some leverage at recouping his or her loss. That individual can use a Chapter 7 bankruptcy petition in order to find relief. It’s possible to file bankruptcy on a mortgage that was taken out with a former spouse without involving that person. If the debt is discharged in bankruptcy court, the petitioner will no longer be responsible for paying any share of delinquent mortgage payments. Even so, his or her name will remain on the note until… Continue reading

Bankruptcy and its affect on student loan debt

Sometimes New Yorkers get into costly situations — such as a divorce — that wipes out a large portion of their finances and assets. They may turn to bankruptcy to wipe out debt and obtain a fresh financial start. But what happens when parents file for bankruptcy while paying on their child’s student loans? Bankruptcy often wipes out credit card debt, car loans and personal loans, but it usually does not do anything with student loan debt. Even if the debt is listed in the bankruptcy proceedings, it won’t get erased unless a complaint is made against the lender during the bankruptcy filing. It’s very rare that this happens because it is very expensive for someone to do. So unless this step is taken, the parent is still on the hook to repay the debt. This means that the lender can still collect the unpaid balance through various means, such as wage garnishment, Social Security or through tax refunds. In addition, even if the child signed off on the student loan, the parent can still be held liable even in bankruptcy. For those struggling with debt, bankruptcy can be a viable option. However, it doesn’t get rid of all debts…. Continue reading

Medical bills forced politician into Chapter 7 bankruptcy

M Many New Yorkers may face massive medical bills and end up drowning in debt, no matter how hard they try to repay them. Some have no choice but to file for bankruptcy in order to rebuild their credit. A politician has recently admitted to having to file for Chapter 7 bankruptcy in 2003. The Republican candidate from Oregon, who is preparing for the November 4 election, filed for bankruptcy due to the debt he faced from his ex-wife’s illness. The couple had no health insurance at the time. They had owed $20,000, mostly in medical debt. In addition, two creditors — Asset Management Outsourcing and Western Credit and Collection — filed lawsuits against the couple, for a total of more than $13,000. The debts and lawsuits were combined into the bankruptcy filing. The marriage could not survive the medical and financial problems the couple faced, and the two divorced later that year. The ex-wife received the treatment she needed and recovered from her medical condition. Both have since remarried. Although opponents would likely use the politician’s bankruptcy as part of a mudslinging campaign, the man prefers to think positively of the situation. He says that it shows that everyone… Continue reading

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