Discharging Your Debt with Bankruptcy

Dischargeable debts are a primary reason that many people file bankruptcy. Whether you have considerable consumer debts, medical bills, or other types of debt, Chapter 7 or Chapter 13 bankruptcy can allow you to discharge most of them. To find out if your debt can be discharged, as well as to learn about the process through which dischargeable debts can be eliminated, contact a skilled bankruptcy attorney. The Law Office of Jack G. Lezman, PLLC has extensive experience in helping people discharge their debts through bankruptcy. We can help you start the process today. Call us today for more information.

How Can Bankruptcy Help Me Find Financial Debt Relief?

If you are in stressful financial circumstanced and are facing substantial consumer debt, it may be your best option to pursue bankruptcy. Chapter 7 bankruptcy allows you to have your debts discharged and therefore, forgiven. Through Chapter 7, your debts are liquidated and you are not held responsible for repayment. The other form of bankruptcy that allows you to have your debts discharged is Chapter 13 bankruptcy. If you are faced with repossession, you can have those debts discharged after your repayment plan has concluded, generally between three to five years. After that time period has ended, you will be free of your debt.

What Does It Mean to Discharge Debt?

To discharge debt means that you completely eliminated it and no longer owe it to the original creditor or any third parties they may be working with to collect that debt. The creditor and third parties may no longer use collection actions or take legal recourse against you after your debt is discharged. You are no longer legally required to repay debts that have been discharged. Unsecured debt, such as credit cards and medical bills, are often dischargeable debts. They are not tied to any property and can be quickly eliminated by the court. However, secured debt is more complicated. Although you discharge secured debt, the creditor may still have a lien on the property that secures that debt. For example, if you own a car and have a car loan that is discharged, the lender can still repossess the vehicle. There are exceptions to the ability to discharge both unsecured and secured debts.

Timing Requirements for Dischargeable Debts

Your dischargeable debts must meet timing requirements, which includes when you incurred them. The bankruptcy court may separate debt into two categories for timing:
  • Pre-Filing Debt – Incurred before you file for bankruptcy. It includes anything that you accumulated prior to the day you filed. At the end of your Chapter 7 bankruptcy, the court will eliminate any dischargeable debts that were incurred pre-filing.
  • Post-Filing Debt – Incurred after you file bankruptcy. This includes anything that accrues on your accounts or that you fail to pay after the day that you file. You will be responsible for paying these debts, even if you incurred them prior to the conclusion of your bankruptcy.
Dischargeable debts are those that you incurred pre-filing, or before you file bankruptcy. This is just one requirement for dischargeable debts; however, the court will require you to categorize and reveal all your debts. You can determine the date on which you filed your bankruptcy by looking at your bankruptcy documents. The filing date should appear near the case number on your documents. You can also request this information from your bankruptcy attorney.

Categories of Dischargeable Debts

You can discharge much of your debt through Chapter 7 and Chapter 13 bankruptcy. There are, however, categories of debts that you cannot discharge. This includes things like some taxes, child support, alimony, student loans (unless you can show undue hardship) and more. However, even debts that are traditionally nondischargeable may be eligible for elimination in certain circumstances. Common categories of dischargeable debts include:
  • Credit cards, including charges and fees
  • Third party collection accounts
  • Medical bills
  • Personal loans from companies and individuals
  • Past due utility bills
  • Checks that you did not honor (unless they involve fraud)
  • Student loans (when you can show undue hardship)
  • Deficiency balances on repossessions
  • Personal injury claims (unless they involve drunk driving)
  • Business debts
  • Past due rent and other money owed under a lease agreement
  • Civil court judgments (not related to fraud)
  • Unpaid taxes of a certain age and tax penalties
  • Attorney fees
  • Charge accounts that are revolving (unless related to extended payment charges)
  • Overpayments of Social Security
  • VA loans and assistance overpayments
If any of these debts are related to fraud, then they may not be dischargeable debts in your bankruptcy. In many cases, the creditor will make accusations of fraud prior to your filing bankruptcy or at your meeting of creditors. If a creditor has accused you of fraud, you should contact a bankruptcy attorney right away.

Dischargeable Debts Through Chapter 7 Bankruptcy

Many people seek Chapter 7 bankruptcy because it is possible to quickly eliminate all your debt. Chapter 7, often called “liquidation,” allows you to discharge most or all your debts. Very few of your debts will be nondischargeable through Chapter 7. When you file a Chapter 7 bankruptcy, you will list all your debts. Your bankruptcy trustee will verify them and your creditors will be notified. If any creditors call you after you file bankruptcy, you can give them your bankruptcy case number and attorney’s contact information. Your creditors will also have an opportunity to comment on your debts at the meeting of creditors. They may claim fraud or challenge your debt amount or status. However, in the end, the court will have a list of your dischargeable debts. A Chapter 7 bankruptcy can take between four and six months to engage in the bankruptcy process. After around six months, the court will close your case and discharge the majority of your debts. The bankruptcy will completely discharge your debts and you will not have to pay them back.

Dischargeable Debts Through Chapter 13 Bankruptcy

Although Chapter 13 bankruptcy involves a three to five year payment plan, you can also discharge debts through Chapter 13. In most cases, you will engage in a similar process to that of Chapter 7. However, you will repay as much of your debts as possible. After you have completed your payment plan, the remainder of your dischargeable debts will be discharged. Through Chapter 13, you can include even debts  that are dischargeable in your payment plan. The goal is to repay as much of your debt as possible. However, you will likely only repay a fraction of your dischargeable debts. Anything that is not repaid will be discharged and you will not be responsible for paying back those creditors.

Get Help From a Charlotte Bankruptcy Attorney

It is essential to make sure you know the differences in your options and how each can help you discharge your debts. One of the primary benefits of bankruptcy is having your debts discharged. Understanding how and when your debts are discharged in the various forms of bankruptcy is also essential. If you are considering filing for bankruptcy for the purpose of having your substantial debts discharged, please feel free to consult with a Charlotte bankruptcy lawyer from our firm. We can help you understand your options and what might be best for your situation. At the Law Office of Jack G. Lezman, PLLC, we have more than 15 years of experience helping clients in the process of discharging their debts. Our goal is to help you achieve freedom from the overwhelming debts that undoubtedly affect your life. During an initial case evaluation, we can assess your personal financial circumstance. Your situation requires an individual strategy based on your specific needs and desires. It is important to obtain as much information as possible to know how bankruptcy can affect your life. Contact our debt relief attorney about dischargeable debts to begin discussing your situation. Call today!
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