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Dischargeable Debts in a Chapter 7 Bankruptcy

Posted By admin || 9-Apr-2012

Dischargeable Debts in a Chapter 7 Bankruptcy

When it comes to Chapter 7 bankruptcy , the primary goal is to get most (if not all!) of your personal debts discharged. From the sky-high credit card bills to medical debts - and everything in between - discharging your biggest debts can give you the fresh start you need to start living a financially stable life.

However, it is important to note that not all of your debts will be dischargeable under a Chapter 7 bankruptcy. Additionally, you may find that more non-exempt property (such as second cars or houses) can be used to satisfy your debts in a Chapter 7 than in a Chapter 13 bankruptcy .

So what are dischargeable debts in a Chapter 7 bankruptcy - and what debts will be leftover once your bankruptcy case has been approved?

Let's take a look:

Chapter 7 Bankruptcy Dischargeable Debts

Dischargeable debts will vary according to your state laws; however, using federal guidelines, these are the debts you can expect to discharge under a Chapter 7 bankruptcy:

  • Any business debts that were incurred under your tax ID or Social Security Number
  • Credit card debts
  • Medical debts
  • Mortgages (however, there is a significant risk you will lose your home if you discharge your mortgage debt)
  • Auto loans and leases (again, you run the risk of losing your car if you discharge your auto debt)
  • Any collections against you
  • And other personal debts

Now that you know the debts that can be discharged against you (including the risks they carry), here are debts that you will still have to deal with once your Chapter 7 bankruptcy case has been approved.

Chapter 7 Bankruptcy Non-Dischargeable Debts

Under federal and state laws, these debts cannot be discharged under a Chapter 7 bankruptcy:

  • Child support and alimony (including any back support owed);
  • Student loans  (the only exception to this rule is if paying off the student loans will cause you significant financial hardship. This can be difficult to prove, so be sure to have an experienced and knowledgeable bankruptcy attorney by your side for this fight);
  • Income taxes that are less than three years old;
  • And any court judgments against you that resulted from drunk driving (for example, if you injured or killed someone while driving intoxicated).

Find an Experienced Bankruptcy Attorney

Find an experienced bankruptcy attorney to help ensure that any and all potentially dischargeable debts are eliminated when you file for a Chapter 7 bankruptcy.

Categories: Chapter 7 Bankruptcy
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