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 DebtsYour 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.
Categories of Dischargeable DebtsYou 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