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What's Dischargeable in Bankruptcy?

What's Dischargeable in Bankruptcy?

If you are experiencing financial hardship and having trouble making ends meet, it is worth exploring all of the options available to ease your burdens. For people who are heavily in debt, going through a divorce, have large unpaid medical bills, or are behind on their mortgage payments, filing bankruptcy could be a logical solution — here’s why.

Chapter 7 vs. Chapter 13 - Which is Right for You?

Determining which type of bankruptcy you should file depends on your financial situation. Please note that for the vast majority of filers, the same debts that are dischargeable in CH7 are dischargeable in CH13. Here are some differences between Chapter 7 and Chapter 13:

Chapter 7, also known as “straight” or “liquidation” bankruptcy can discharge the following types of debts:

  • Credit card debt
  • Medical debt
  • Personal loans
  • Payday advances
  • Broken cell phone contracts
  • Past car repossession deficiencies
  • Issues with prior landlords
  • Stop garnishments

Chapter 13, also known as a wage-earner’s or reorganization plan, for most filers will discharge the debts listed above and, can provide the following benefits for individuals or families with a consistent monthly income:

  • Avoid foreclosure
  • Repay/reduce tax debt through a payment plan
  • Avoid car repossession (or restore within 10 days of repo)
  • Reduce debt to one affordable monthly payment
  • Stop garnishments
  • Stay student loan collection efforts
  • Obtain debt relief with very little or no money needed upfront to file

While Chapter 13 can be a solution to foreclosure, the bankruptcy laws in this instance are very different in Kansas and Missouri. It’s best to contact Moore & Associates for guidance should you be faced with the threat of foreclosure — they are experienced attorneys well-versed in bankruptcy law and serve clients in both states.

What Debts Are Not Dischargeable In Bankruptcy?

The following debts cannot be discharged by filing for bankruptcy.

  • Student loans
  • Alimony/maintenance
  • Child support
  • Secured debts on assets the filer wants to keep
  • Most taxes
  • Criminal and traffic penalties and fines

Additionally, if the person filing bankruptcy took on an excessive amount of debt right before filing, the most recent debt may not be eligible.

What Is Dischargeable?

There is a broad range of debts that are dischargeable in bankruptcy. Debt accrued on the following may be removed or negotiated for better terms:

  • Credit cards
  • Payday loans
  • Unsecured personal or signature loans
  • Unsecured loans
  • Deficiencies on prior vehicle repossessions
  • Deficiencies on prior foreclosures
  • Medical bills
  • Most Judgments
  • Most Lawsuits
  • Unpaid utility bills
  • Debts owed to prior landlords
  • Most collection accounts
  • Broken cell phone contracts

For people struggling to pay their bills for any number of reasons, getting these debts discharged offers a fresh financial start.

How A Bankruptcy Attorney Can Help

When facing financial difficulties, your bankruptcy attorney offers sound advice and acts as your advocate. We talk about your situation to understand it. We know bankruptcy laws and can explain the options available to you, along with the advantages and disadvantages of each choice.

Find out if bankruptcy is a viable debt solution for you. Contact Moore and Associates, LLC today to learn more about bankruptcy as well as our no cash upfront options. We have over 30 years of combined experience helping thousands of families throughout both Kansas and Missouri.

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