Bankruptcy can eliminate many unsecured debts, including credit card balances, medical bills, personal loans, utility bills and collection accounts. Some obligations, including child support, alimony, most student loans and certain tax debts, generally cannot be discharged.

Chapter 7 allows eligible individuals to eliminate many qualifying unsecured debts. Chapter 13 creates a court-approved repayment plan that generally lasts three to five years and may help debtors catch up on secured obligations while protecting important property.

Chapter 7 eligibility depends on factors such as household income, allowable expenses, family size, prior bankruptcy filings and the Chapter 7 means test. A bankruptcy attorney can review your financial circumstances and explain whether Chapter 7 may be available.

The means test compares household income and permitted expenses under bankruptcy rules to determine whether a person is eligible to file Chapter 7 or whether additional calculations are required.

The automatic stay generally takes effect when a bankruptcy case is filed. It ordinarily prevents creditors from continuing collection calls, letters, lawsuits, garnishments and many other collection activities while the stay remains in effect.

In many cases, the automatic stay stops an ongoing wage garnishment after the bankruptcy petition is filed. Certain obligations, such as some domestic-support debts, may be treated differently.

Filing bankruptcy may temporarily stop a foreclosure through the automatic stay. Chapter 13 may allow an eligible homeowner to catch up on missed mortgage payments through a repayment plan, depending on the circumstances.

Bankruptcy may temporarily stop a pending vehicle repossession. Available options depend on whether the vehicle has already been repossessed, the type of bankruptcy filed, the loan balance and the debtor’s ability to make future payments.

Many uncomplicated Chapter 7 cases are completed within approximately three to six months. The timing can vary based on the facts of the case, court schedules, requested documents and any objections or disputes.

A Chapter 13 repayment plan generally lasts three to five years. The required plan term depends on factors including income, expenses, debts and applicable bankruptcy requirements.

Most bankruptcy filers do not lose all of their property. Bankruptcy exemptions may protect equity in certain assets. What a person can keep depends on the type and value of the property, available exemptions and the chapter filed.

Many people keep their homes during bankruptcy. The result depends on the home’s equity, available exemptions, mortgage status, ability to make payments and whether Chapter 7 or Chapter 13 is filed.

Many debtors keep their vehicles after filing bankruptcy. The available options depend on vehicle equity, exemptions, loan status, payment ability and the bankruptcy chapter selected.

Bankruptcy affects a credit report, but the effect is not necessarily permanent. Many people begin rebuilding credit after discharge by paying new obligations on time, keeping balances manageable and monitoring their credit reports.

Medical bills are generally unsecured debts and may often be discharged in Chapter 7 or included in a Chapter 13 repayment plan, subject to the facts of the case.

Qualifying credit card balances can generally be discharged in Chapter 7 or addressed through a Chapter 13 repayment plan. Debts involving fraud, recent luxury purchases or certain cash advances may receive different treatment.

Most student loans are not automatically discharged in bankruptcy. A debtor generally must file a separate proceeding and prove the legal standard required for an undue-hardship discharge.

Some older income-tax debts may qualify for discharge when detailed timing and filing requirements are satisfied. Other tax obligations, including many recent taxes and trust-fund taxes, generally cannot be discharged.

A married person may file an individual bankruptcy case without the spouse filing. However, the non-filing spouse’s income, jointly owned property and joint debts may still affect the case.

A debtor’s bankruptcy discharge generally does not eliminate a cosigner’s responsibility for a joint debt. Chapter 13 may provide a temporary codebtor stay for certain consumer debts while the case remains active.

The 341 meeting is a required proceeding at which the bankruptcy trustee asks the debtor questions under oath about the petition, assets, debts, income and financial affairs. Creditors may attend, although many do not.

Every debtor must ordinarily participate in a 341 meeting of creditors. Additional court appearances may be necessary in Chapter 13 cases or when a motion, objection or disputed matter requires a hearing.

A person may be able to file another bankruptcy case, but the waiting period for receiving another discharge depends on the chapters involved, the dates of prior filings and how prior cases ended.

Individuals are legally permitted to file without an attorney, but bankruptcy involves detailed eligibility rules, exemptions, forms, deadlines and court procedures. Legal representation can help identify risks and ensure the case is properly prepared.

Ferguson & Ferguson offers a no-obligation initial consultation to discuss bankruptcy and debt-relief options. The firm has offices in Huntsville and Decatur, Alabama.