Debts Remaining After a Chapter7 Discharge

Chapter 7 bankruptcy cases do not eliminate all debts. In general, these types of debts cannot be discharged in a Chapter 7 proceeding. Debts not listed at the beginning of the case (or for unlisted creditors). These are known as “schedules”. These lists must be filed with courts. Most student loans are not repayable unless the debtor or their dependents are in undue hardship

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Current federal, state, or local taxes Support for children and spousal maintenance (alimony). Restitution, fines and other penalties imposed by the government Court fees Personal injury and wrongful death claims arising from drunk driving cases. Prior bankruptcy debts that were not dischargeable

Certain pension plans – Debts Certain condominium fees and dues debts Due to fraud, debts cannot be discharged in bankruptcy. Additional Non-Dischargeable Debts If a creditor objected during the case, these debts will not be discharged. Creditors will need to prove that the debt falls within one of these categories.

Fraud leads to debts Certain debts related to luxury goods and services purchased within 90 days of filing Certain cash advances can be made within seven days of filing

Defaults due to malicious and willful acts Debts resulting from theft, embezzlement or breach of fiduciary obligation If you are able to pay and the detriment for the recipient is greater than the benefit, you may have to pay the debts.

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Chapter 7 Debt Discharge 101

Individuals are exempted from most debts by filing for bankruptcy. This prevents creditors from pursuing collection actions against you.

Debtors should seek competent legal counsel before filing a Chapter 7 bankruptcy discharge. There are many exceptions to Chapter 7 discharges. It is important that you discuss the scope of your discharge.

In general, individual debtors are discharged in more than 99 percent of Chapter 7 cases (exclusions being dismissed or converted).

Unless a creditor files an objection to the discharge or a motion for extension of time, the bankruptcy court will issue the discharge order fairly early in the case. This usually happens between 60 and 90 days after the creditors’ meeting.

In bankruptcy, student loans will not be canceled

The above-mentioned list does not include educational loans that can be discharged under Chapter 7. They can be rescinded if the court determines that the repayment of the loan would cause an undue hardship for the debtor or their dependents.

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You must prove that you are unable to make student loan payments during bankruptcy proceedings or in the future.

Before any other debts are discharged, you must first apply for hardship discharge. The standard bankruptcy fees do not include the application for hardship discharge. After the case has been filed, it must be paid.

When Debt Discharge Is Denied

Although the debts you have are likely to be eligible for a discharge, other circumstances could prevent them. If creditors can show that your debt is not in compliance with the requirements for a discharge, they can request the court to deny it.

Talk to a bankruptcy attorney to get control of your debts

Bankruptcy can help you eliminate credit card debt, medical bills, creditor harassment, and other financial obligations. Even the best-executed bankruptcy filings will result in certain debts, including student loans or child support obligations.

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An attorney can help you determine the amount of debt that will be discharged. You will be able to see which debts can and cannot be discharged through a Chapter 7 filing. These attorneys will also offer suggestions on how to manage these debts. Get in touch with a local bankruptcy lawyer today.