How much of my debt can I erase with bankruptcy?

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How much of my debt can I erase with bankruptcy?

My ex wife and I built a salon, which she ran and still does. She assumed responsibility for the debt in the divorce agreement and I got our credit card debt. I lost my job and I am currently struggling to make ends meet. She has ruined the business by running off employees and clientele. I know my name is on the salon mortgage and I share the burden of debt, but I need to know if filing bankruptcy will erase my credit card debt and my share of the salon loan.

Asked on August 11, 2010 under Bankruptcy Law, Oklahoma

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I would strongly suggest that you seek credit counseling in your area as soon as you can. Generally, there are two provisions of the bankruptcy code that you can file under: Chapter 7, which is a "liquidation" proceeding where non-exempt assets are turned over for liquidation to pay off debt and then the debt not paid off is "discharged" or wiped out; and Chapter 13, which is a "reorganization" of the debt to be paid off in three to five years.  You seem to want to go the Chapter 7 route given the present situation with your finances.  Yes, it is my understanding that the debt you list - in your name - will be erased against you when the bankruptcy is discharged.  Seek help so you know what your options and exemptions are and you can make a solid decision on this matter.  Good luck. 


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