Can That Bankruptcy Debt Be Discharged? How To Know

Posted on

The goal of chapter 7 bankruptcy is to rid yourself of as much debt as possible and make a new start. To that end, knowing what can be discharged might be helpful for those still undecided about declaring bankruptcy. When a debt is discharged, it simply goes away never to be seen again. If that interests you, read below and learn about some common consumer debts that can be discharged.

The Elephant in the Room: Credit Card Debt

A lot of people have a lot of credit card debt and, it should be no surprise, that is what brings many to the brink of filing bankruptcy. It's all too easy to obtain those cards and use them until the minimum balance due is sky-high. Fortunately, credit card debt is usually entirely wiped out with a chapter 7 bankruptcy. Not only are you wiping out the burden of that debt but not having to pay the monthly bills opens up a lot more usable income for your post-bankruptcy budget.

The Embarrassing Debt: Personal Loans

Some filers are too reluctant to list personal loans when they file bankruptcy and that is a pity because they are certainly a debt that can be discharged. You may not want to list the name of a friend or relative that you owe money to on the bankruptcy paperwork and that is understandable. However, you might not have a choice. If the bankruptcy trustee finds out that you are paying off a personal loan, you could be accused of favoring certain creditors over others and that's a big no-no. Speak with your bankruptcy lawyer about your personal loans and listen to their advice. By the way, personal or signature loans from a bank can also be discharged.

The Justified Debt: Medical Bills

If credit card debt doesn't bring you to bankruptcy, medical bills may. Medical expenses can be punitive and no one wants to imagine not seeking care when you or a loved one needs it. Some people with medical debt are all too familiar with the aggressive nature of medical debt collectors. It might be somewhat satisfying to learn that the calls, letters, and all contact from medical debt collectors and everyone else must cease immediately after you file for chapter 7 bankruptcy protection. Getting rid of that debt is also very satisfying and that happens as soon as you file since medical debts are always included in your list of discharged debts.

To find out the details of chapter 7 bankruptcy, speak to a bankruptcy lawyer about your case as soon as possible.