Will Chapter 7 bankruptcy get rid of all my debts?
If you are considering filing for Chapter 7 bankruptcy, it is important to know which debts will be discharged at the end of the process. Not all debts are dischargeable so the amount of your remaining debt will depend on the type of debt you have already incurred.
Most unsecured debts may be eliminated through bankruptcy, including credit cards, medical bills, and personal loans. Unsecured debt is simply debt that was not collateralized by specific assets.
On the other hand, Chapter 7 bankruptcy will not relieve you of your obligations to pay back certain debts:
- Child & Spousal Support. Debt for court-ordered family support will not be wiped out nor will it be halted by the automatic stay. Keep paying these types of obligations, even after filing for bankruptcy.
- Taxes. While in some limited circumstances, you may be able to discharge old income tax, you will most likely be prevented from discharging any tax debt.
- Student Loans. Student loan debt is only discharged in cases where it will cause undue hardship for the student, which means that you will need to show that you will most likely not be able to pay it in the future either.
- Secured Debt. Debts that have been secured by property that you own will not be eliminated. The mortgage holder technically holds a lien on your property, so they have a right to take it from you if you do not pay the debt. Usually secured debts involve property like a house or car.
To find out if Chapter 7 bankruptcy will eliminate your debts, talk to a Hampton bankruptcy attorney from The Law Office of Philip R. Boardman, P.C. We can discuss your goals for your property and find out the best way to proceed. Call now to get started!