People get into debt for a variety of reasons. Whether you ended up there through a job loss, unexpected illness or injury, or some other monetary calamity, you now need to find a debt relief option that allows you to get back on your feet financially.
You’re thinking of filing for Chapter 7 bankruptcy, but you may not be sure just what a discharge could do for you. There are often a lot of rumors and myths out there regarding this type of bankruptcy, but you need to know the truth before making big decisions.
What a discharge can and can’t do for you
A Chapter 7 discharge eliminates your responsibility to repay certain debts. Your creditors will no longer come to you for payment of the debts that received a discharge. The disruptive, stressful and annoying phone calls should stop when you file, but your discharge could stop many of them for good. However, there are certain debts you generally cannot discharge, including the following:
- Student loans
- Some tax debts
- Alimony
- Child Support
- Criminal restitution orders
- Personal injury or wrongful death judgments based on impairment
- Debts owed for malicious injury to another party
You must still list these types of debts when you file your Chapter 7 bankruptcy, but that doesn’t mean the court will include them in your discharge. You may remain liable for these debts after the proceedings end.
You may want to keep some debts
You may also remain liable for certain debts that you wish to continue to pay. For instance, many people want to keep their vehicles, so they may enter into “reaffirmation agreements” with their lenders. This agreement reiterates your financial obligation to your lender. If your lender and the court agree, you will continue to owe these types of debts and retain the property that secures them.
You may want some help
Many people attempt to file bankruptcy on their own, but this could create problems. The process can be complex, the paperwork can be confusing and if you miss a court established deadline, your case could be dismissed. So, it may be a good idea to consult with an attorney who can help you through the process.
