If you are considering filing for bankruptcy, it is likely because you are anticipating that many of your debts will be discharged in the bankruptcy process. Filing for bankruptcy does allow many debtors to have a new financial beginning. However, many debtors are unsure which of their debts will be discharged in the bankruptcy process and which debts they will continue to have responsibility for afterward. Learn which debts typically go away in bankruptcy and which ones remain by following this quick guideline.
Personal Debts
Many consumer debts, including medical bills and credit card debt, will be dismissed and discharged within a Chapter 7 bankruptcy, but not all personal debts will be. Some of the types of debts that are not discharged in a Chapter 7 bankruptcy include student loan debt, child support payments, spousal support payments, and any other debts that were issued or mandated by a court of law. While these debts are not discharged in bankruptcy, filing for bankruptcy can still be financially beneficial because other debts will be removed leaving more financial resources to pay those that remain.
Debts Owed to Governmental Entities
Debts listed in 11 U.S.C. §523 of the bankruptcy code are also non-dischargeable and include debts owed to governmental entities such as city, state, or municipality, county, or federal governments. The government makes these types of debts a priority, therefore any traffic tickets, parking tickets, or other debts or fines owed to a governmental entity will not be discharged within a bankruptcy. However, there are certain circumstances under which a state, city, or municipality would allow a debt to be discharged within a bankruptcy under certain circumstances. It is important to note that it is not typical or expected that any debts owed to governmental entities will be discharged within the bankruptcy process.
Debts That Will be Discharged in Bankruptcy
There are certain debts that are typically discharged within a bankruptcy. These types of debts include personal loans, consumer debt, medical bills, and credit card debts. These types of debts are discharged within a Chapter 7 bankruptcy. Chapter 7 bankruptcy will require that a debtor sell as many assets as possible in order to pay off any remaining debt, and whatever debt is left over will be discharged in the bankruptcy process. If a debtor makes the decision to file a Chapter 13 Bankruptcy, this will not actually eliminate any debt, but rather allow the debtor to create a reorganization plan to repay their creditors over three to five years.
Contact an Experienced Bankruptcy Attorney Today
If you are considering filing for bankruptcy and are curious which debts will go in bankruptcy and which ones will remain, visiting with an experienced bankruptcy attorney can help you understand your legal rights and ensure that they are protected. Contact the experienced bankruptcy law attorneys today at Lankford & Moore Law today. We would welcome the opportunity to help you with your bankruptcy case.
