The main reason that most people go bankrupt is to get their creditors off their back, and to be able to hold onto what they own. Plus, it is looked upon as a new start. All too often people enter into a bankruptcy under the assumption that every debt they own or that any law suit judgements in place against them are going to be totally wiped out.
Why You Need Counsel
This is the wrong approach to take when considering bankruptcy. Your first positive step should be to seek out the advice and help of a bankruptcy lawyer.
There is a good chance that the law suit judgements against you will be discharged in a Chapter 7 bankruptcy, but only it is classed as a dischargeable debt. You need to know exactly which of your debts are non-dischargeable and are you still going to be held responsible for the judgements that pertain to them. The more common types of non-dischargeable debts are student loans, obligations such as child or spousal support, and several different types of government debts. The list goes on, and this is why it is important to know how your debts are going to be classified.
You don’t want to just assume that by entering into a bankruptcy that each and every debt you have will be wiped clean. What you do need to keep in mind is however, that with some of your debts being expunged that you may be in a much better financial position to deal with the ones that you are left with.