Are Dischargeable Debts in Chapter 7 Bankruptcy Leaving You Confused? Let Us Help You!
Declaring bankruptcy, despite its initial challenges, often acts as a financial reset button for many individuals. Key to this process is understanding the potential advantages, one of which is the concept of dischargeable debts in Chapter 7 bankruptcy in Wisconsin. This knowledge equips individuals with insights about the legal protection from creditors, debt reduction, and opportunities for financial reconstruction that Chapter 7 bankruptcy offers.
While the road to financial recovery can be complex, the bankruptcy attorneys at Miller & Miller Law, LLC, stands ready to help. For a free case evaluation and to learn more about how our attorneys can help you navigate the complexities of bankruptcy, reach out to us today. Your path to financial recovery starts here.
What is there to Know About Dischargeable Debts in Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, is a legal avenue that enables individuals and businesses to eliminate most of their debts and embark on a fresh financial journey. This option is often accessible to individuals who meet certain income criteria and who lack the means to settle their debts through a repayment plan.
An integral part of this process involves the concept of dischargeable debts. These are specific debts that can be absolved or dismissed under bankruptcy laws, providing the debtor with a new financial start. Through a legal mechanism known as a discharge, debtors are relieved from the personal liability of certain debts in a Chapter 7 bankruptcy. However, it’s essential to understand that not all debts are dischargeable.
Common categories of dischargeable debts often include:
Credit card debt
In most cases, Chapter 7 bankruptcy allows you to erase unsecured debt like credit card debt
Unpaid medical debt can generally be discharged under Chapter 7 bankruptcy.
Unsecured personal loans are typically dischargeable in most Chapter 7 bankruptcy cases.
In Chapter 7 bankruptcy, unpaid utility bills, such as those for electricity or water, may be discharged.
Unsecured payday loans are commonly dischargeable under Chapter 7 bankruptcy.
Several civil judgments
You may be eligible for a discharge under Chapter 7 bankruptcy if you have civil judgments against you for damages originating from auto accidents or other comparable events.
Understanding and managing dischargeable debts in Chapter 7 bankruptcy can be complicated. This is where the experience of Miller & Miller, LLC, Wisconsin bankruptcy attorneys, proves invaluable. They provide essential guidance, ensuring your bankruptcy filing is effective and accurate, thus increasing your chances of successful debt discharge.
What are the Exceptions to Dischargeable Debts in Chapter 7 Bankruptcy?
Dischargeable debts are those that can be absolved or “discharged” during a Chapter 7 bankruptcy process. Although common categories like credit card debt and medical costs are widely recognized, here are some important exceptions and less well-known facts about dischargeable debts in Chapter 7 bankruptcy:
Student Loans: Typically, student loans are not dischargeable in bankruptcy, including Chapter 7. Only in rare circumstances, when the debtor can demonstrate undue hardship—a process that often requires a high standard of proof—may student loans be discharged.
Income Taxes: Under certain conditions, income taxes can be discharged in Chapter 7 bankruptcy. For this to occur, the tax debt must be at least three years old, the tax return must have been filed at least two years prior to filing for bankruptcy, and the taxes must have been assessed at least 240 days before filing bankruptcy.
Alimony and Child Support: In most instances, alimony and child support obligations cannot be discharged in bankruptcy. Therefore, even after filing for bankruptcy, you will still be liable for these debts as Chapter 7 does not absolve them.
Luxury Purchases: Debts stemming from luxury purchases exceeding a specific amount made within 90 days prior to declaring bankruptcy may not be dischargeable. For the most current threshold amount, consulting with a bankruptcy attorney is crucial.
With the nuances surrounding dischargeable debts in Chapter 7 bankruptcy, legal counsel is vital. Contact Miller & Miller, LLC today for specific advice.
Can Secured Debts Be Discharged in Chapter 7 Bankruptcy?
Secured debts, those tied to an asset such as a home or vehicle, can be discharged in Chapter 7 bankruptcy. However, you’ll likely have to forfeit the asset serving as collateral. Why is this? It’s because bankruptcy does not erase the attached lien, and thus, the creditor retains the right to reclaim the asset if the debt is unpaid. This means you could discharge a mortgage or car loan, but the house or car would likely have to be surrendered.
If you’re willing to part with the secured asset, it could be beneficial for you to allow the creditor to repossess it. Your intention to surrender the asset should be indicated in your bankruptcy documentation. You’re not obligated to physically hand over the asset to the creditor, but cooperation is required during the repossession process. In some cases, creditors might not pursue repossession of smaller items due to the costs involved.
In rare circumstances, if the creditor neglected to secure their interest in the property, you might retain possession. Suppose, for example, an automobile dealer overlooked securing a lien on your car, and its value falls within the exemption limit for vehicles. In such cases, the claim becomes unsecured, enabling you to retain the car as exempt property. However, bear in mind that such situations are rare, and you would need to safeguard the entire car value with a bankruptcy exemption. If you cannot, the appointed Chapter 7 trustee may sell the car, reimburse you with your exemption value, and utilize the rest to pay back creditors. Explore more about retaining a car through a Chapter 7 bankruptcy process.
Why Do I Need a Wisconsin Bankruptcy Attorney like Miller & Miller, LLC?
Filing for Chapter 7 bankruptcy requires careful navigation through intricate legal processes and attention to the accuracy of required documentation. For individuals or corporations aiming to discharge their debts and initiate a financial fresh start, the guidance of Miller & Miller, LLC can prove invaluable.
Here’s how our legal team can help:
- Knowledge of Bankruptcy Laws: The team at Miller & Miller, LLC is adept at managing complex paperwork, adhering to strict deadlines, interpreting nuanced bankruptcy rules, and guiding you through court procedures.
- Advocacy During Filing Process: As your representatives, Miller & Miller, LLC defends your rights, advocates for you in court, and handles communications with creditors, ensuring you receive fair treatment and legal protection.
- Asset Preservation Assistance: By identifying and applying exemptions, our bankruptcy attorneys can work towards protecting your valuable assets from liquidation during a Chapter 7 bankruptcy. We also provide guidance and support in resolving any arising issues or disputes.
Choosing Miller & Miller, LLC as your legal counsel can enhance the success of your Chapter 7 bankruptcy filing. We uphold your rights, handle intricate legal matters, and guide you toward a favorable outcome and a fresh financial start.
Call our Wisconsin Bankruptcy Lawyers Now!
Navigating the complexities of Chapter 7 bankruptcy cases, especially those involving dischargeable debt, demands the support of experienced bankruptcy attorneys. Armed with a thorough understanding of intricate bankruptcy rules and regulations, our attorneys at Miller & Miller Law, LLC can guide you smoothly through the entire process.
We offer a comprehensive range of services including filing bankruptcy, conducting a free case evaluation, and addressing other bankruptcy concerns. We don’t just stop at bankruptcy law. Miller & Miller Law, LLC also extends its legal skills to areas such as Immigration, Worker’s Compensation, and Civil Litigation.
Our team can help determine your eligibility for Chapter 7, identify dischargeable debts, and ensure all necessary documentation is correctly completed and filed. We’re your advocates in meetings with creditors and the bankruptcy court, staunchly representing your interests and rights.
Don’t let the intricacies of bankruptcy law overwhelm you. Maximize the discharge of your obligations and embark on a new financial journey with confidence. Contact Miller & Miller Law, LLC today for a free case evaluation, and let us help you navigate your Chapter 7 bankruptcy case.