Obviously the goal of bankruptcy to is to get out of debt, but not all debt is created equal. The types debts that are dischargeable in bankruptcy depend on whether you are filing Chapter 7 or Chapter 13 bankruptcy.
Debts Dischargeable in Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to discharge your debts more quickly, but requires selling your assets to pay off priority debts.
Once these priority debts are paid, the bankruptcy courts are left what debtors remain that can be discharged. Common types of debt that are discharged in Chapter 7 bankruptcy proceedings include:
However, some debts are never dischargeable in Chapter 7 bankruptcy. Those include debts for child support or alimony, government and court fines, and personal injury judgments related to driving while intoxicated. Student loans are sometimes discharged in Chapter 7 bankruptcy, but this can be extremely difficult to accomplish. In addition, a court may deny discharge of any debts in Chapter 7 bankruptcy if it finds evidence of fraud or a debtor is uncooperative. Because of the unique nature of every bankruptcy case, it’s important to consult with an experienced attorney if you are considering filing for Chapter 7 bankruptcy.
Debts Dischargeable in Chapter 13 Bankruptcy
While Chapter 7 bankruptcy allows for a complete discharge relatively soon after filing, Chapter 13 bankruptcy puts discharge off for several years, although you are able to keep your assets during the process. Debts are classified as either priority or nonpriority, with nonpriority debts partially or completely discharged after a 3-5 year repayment plan.
Chapter 13 bankruptcy discharges the same debts as chapter 7 bankruptcy, with several additions. If certain specific conditions are satisfied, junior liens such as second or third mortgages may be discharged in Chapter 13 bankruptcy.
In addition, Chapter 13 bankruptcy allows for the discharge of debts related to willful and malicious property damage or debts incurred to pay off taxes, such as a high credit card bill as a result of paying a tax debt. In Chapter 13 bankruptcy, a court also may discharge certain debts assigned to you in a divorce proceeding. However, alimony and child support debts remain nondischargeable in Chapter 13.
This list of dischargeable and nondischargeable debts is by no means exhaustive though, and determining whether to file for Chapter 7 or Chapter 13 bankruptcy is decided on a case-by-case basis.
Thinking About Filing for Bankruptcy?
If you are overburdened with debt and looking for a legal way out, then filing for bankruptcy may be right for you. The Law Offices of Melanie Tavare of Hayward and Oakland can help relieve your tax burden through Chapter 7 or Chapter 13 bankruptcy. Contact the Law Offices of Melanie Tavare at 510-255-4636 or online.
The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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