Talking about debt can bring up all sorts of emotions, leaving some to worry in silence about their own debt or a family member’s finances. Here some answers to some of the most common questions about debt.
Can I inherit my spouse’s or family member’s debt after they die? This depends on the debt. The assets left behind after a death typically go towards paying off that individual’s debt. After that runs out, the creditor typically suffers the loss. Co-signers when it comes to student loans, mortgage debts and joint credit cards will likely be on the hook for any remaining balance. Know the dangers co-signing a loan and make sure and carry enough life insurance to cover all of your debts.
Is there a limit to the amount of debt I can take on? The answer is no, but it depends largely on the type of debt. Lenders sometimes offer you more credit than you can pay back. Think of a loan you would take out to start a new business or taking out a mortgage to purchase a new home. Even if you qualify for the loan, be realistic about what you can afford to repay.
Can I be arrested for outstanding debt? The answer is no. The Fair Debt Collection Practices Act (FDCPA) bars debt collectors from harassing and threatening you with arrest or jail. However, they can sue you for payment. Know your rights when dealing with debt collectors and consult with an experienced bankruptcy attorney before receiving a court summons or being sued by a creditor.
If I file for bankruptcy, will ALL of my debt be erased? Alimony and child support obligations cannot be erased in bankruptcy. Student loans, certain tax debts and judgments against you can be difficult to get discharged as well.
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If you have any questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.