Dischargeable Debts when Filing for Bankruptcy
The point of filing for bankruptcy is to have as many of your debts as possible discharged, or “written off” so that you, and maybe your spouse or your whole family, can start anew. However, as many bankruptcy attorneys will tell you, not all of your debts can be discharged.
The two different types of bankruptcy for regular consumer use include what are called Chapter 7 and Chapter 13 Bankruptcy’s. These options for bankruptcy differ in that a chapter 7 is pretty straightforward – get rid of all debts without much hassle, usually happening in around 3 months’ time. Meanwhile, a Chapter 13 is not so straightforward and all debts may not necessarily be discharged, and the amount of time for the debts to fully be discharged can be between 3 and 5 years.
Here, for the purpose of this article, we’ll focus on the specifics of Chapter 7 bankruptcies.
For anyone interested in proceeding with any type of bankruptcy, one of the most common questions is this: What debts can I discharge? Unfortunately, there is no straight answer. Before you actually hire an attorney, they could say that they can generally discharge XYZ before they know the specifics of your case. After your attorney is familiar with your case, they might have something different to say because the lines of bankruptcy are not always clear. A debts’ discharge will depend upon the creditor, how effortful the creditor wants to be with their case, and ultimately, how a judge will rule. No bankruptcy case can be treated the same as another because none of them are the exactly same.
The good news in all of that is, unless a debt fits an otherwise stated rule, it will most likely be discharged. Furthermore, as there are exceptions to your debts being discharged, there are also exceptions to make them discharged. To ensure that your case is as legal as possible and ensure that you receive discharge (or not, as the case may be) for as much as available to you, provide as much of your personal information as possible to your attorney and keep them in the loop with any changes to your situation. Only after becoming familiar with the inner workings of your case, your attorney will be able to give you the best, accurate advice.
As mentioned, not all debts are discharge-able. Criminal fees and fines, child or spousal support, withholding taxes and student loans are examples of that. In many circumstances, the debtor just needs to meet certain conditions to take a debt from non-dischargeable to dischargeable. Simple considerations like the age of a debt can play a huge role in whether or not it will be discharged. Also, if a debt cannot be discharged in Chapter 7, maybe it can be discharged in Chapter 13. Again, your attorney will know what is best for you. No two bankruptcies are alike.
The Bottom Line
A lot of different items are at play when you mess with anything involving the law, and bankruptcy is no different. Not all debts will be dischargeable, but your bankruptcy attorney is always the best person to talk things over with. They are on your side because they want to help you.