Dischargeable Debts

Dischargeable Debts

May 23

It is important that you consult with a bankruptcy lawyer before you file for Chapter 7 or Chapter 13 bankruptcy. The process may sound simple, but many complex issues may arise that require specific knowledge about bankruptcy law. Chapter 7 bankruptcy lawyers in Dallas do more than simply file your petition to the state bankruptcy court. One of the most crucial is identifying dischargeable debts.

Chapter 7 is primarily a petition to the bankruptcy court to discharge your debts. As long as you meet the eligibility requirements, the court will allow you to do just that. This will help you get rid of your debt burden so that you can move on with your life. However, the court will require you to liquidate all your assets so that you can pay off as much as you can before you get a clean slate.

Dischargeable debts do not disappear. They are still on record, but the court issues an injunction against the creditors so that they can no longer collect from you. Dischargeable debts include:

  • Credit card debts
  • Department store credit cards
  • Foreclosures
  • Medical Bills
  • Payday loans
  • Personal loans
  • Repossessions
  • Signature loans
  • Some (not all) tax debt
  • Utility bills

As a rule of thumb, debts in which the lender has no security interest (unsecured debt) are dischargeable. This means that no property has been used as collateral to secure the debt, such as in a home mortgage. However, it is crucial to understand that even for unsecured debts there are exceptions, such as with tax debts.

Depending on your particular situation, Chapter 7 may be your best option, or it could get you into deeper trouble. Before doing anything, consult with a qualified bankruptcy lawyer in your area. Your lawyer will be able to discuss the nitty-gritty of your financial position and advise you accordingly.

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