Understanding Which Debts Are Not Discharged in Chapter 7 Bankruptcy
Bankruptcy Attorneys help clients complete the paperwork and then file that documentation with the court. Chapter 7 bankruptcy allows the person to discharge much of the debt owed, but some debt is not allowed to be cleared through this program. It's important for men and women to understand the limits of Chapter 7 in case a large amount of their debt does not qualify for discharge.
Most debt can be eliminated with the assistance of Bankruptcy attorneys in filing Chapter 7. People typically file for bankruptcy is because they owe too much in medical bills, credit card debt and personal loans. These obligations can be cleared. bankruptcy lawyers near me will not eliminate past-due payments on vehicles or a mortgage, however. Repossession and foreclosure can still take place.
A Point About Foreclosure
If the person has been fighting foreclosure, it's possible for a judge to side with this individual and require the bank to make a better effort to work out an arrangement. There must be a compelling reason for this, though. A judge might delay foreclosure action if the bank has acted questionably, such as asking the mortgage holder to file for a modification numerous times and refusing payments on past-due amounts.
A chapter 7 bankruptcy lawyer can explain to the client which other debts cannot be wiped out with this process. Examples include back child support and spousal support payments, student loans, and certain kinds of back taxes. Court-issued penalties such as a fine for driving under the influence, also does not qualify.
For some debt that is not automatically discharged, a hearing can be held during which a judge can decide about the matter. Again, the person must have an extremely good reason why the judge should grant the request.
Medical and credit card bankruptcy account for a large percentage of the filings. The most recent research has found that nearly 67 percent of U.S. bankruptcy filings are because of medical expenses. Sometimes medical issues have a role in credit card debt, as people may have to pay their regular bills with credit when they are dealing with a serious illness or injury.
chapter 13 bankruptcy can snowball as people acquire more credit by obtaining more cards and by taking out loans. Eventually they cannot make the minimum payments. Creditors start to call and accounts are turned over to collection agencies. It's a stressful time that the person can alleviate by applying for Chapter 7 protection.