Addressing Debt

People struggle with many different types of debt. Your situation is unique from anyone else’s, and you require a unique solution. Whether you are deep in credit card debt or falling behind on your mortgage, you can receive legal help to discharge or eliminate that debt. More and more people are turning to bankruptcy as an acceptable and sensible alternative. Bankruptcy is not as daunting or as complicated a process as you might think. With the help of an attorney, you can discharge the following types of debt with Chapter 7 or Chapter 13 bankruptcy.

Chapter 7

Chapter 7 bankruptcy is one of the most popular options among consumers, because it allows you to get rid of all or most of your unsecured debts. It also allows you to keep your property. However, it cannot discharge all debts, including some secured loans. If you have any of these types of debts, ask your lawyer how Chapter 7 bankruptcy can help.

1. Credit card debt: Credit card debt is one of the most common types of debt to discharge under Chapter 7. After you finish your repayment plan, any outstanding balance is discharged.

2. Medical bills: Many people find that insurance does not adequately cover their medical expenses, and the balance is financially overwhelming. Bankruptcy can discharge those bills.

3. Unsecured, personal loans: Unsecured loans are loans that do not use collateral, are for a fixed amount, and have a fixed payment period. They can include small business loans, wedding loans, or home improvement loans.

4. Some secured loans: Chapter 7 bankruptcy can discharge some secured loans that use an asset or collateral, such as a car loan or boat loan.

5. Mortgage debt: You can discharge a mortgage loan with Chapter 7 bankruptcy only if you do not wish to keep your house. If you want to prevent foreclosure, choose Chapter 13.

6. Income tax debt: Have you filed your taxes appropriately and on time but find that you cannot pay what you owe to the IRS? You may be able to discharge income tax debt if you meet all the IRS conditions. You may not have to file bankruptcy for large amounts, but you may qualify for a tax workout plan. Speak to your lawyer about this option.

7. Judgments: Judgments include debts you owe as part of a property settlement or divorce settlement; however, bankruptcy cannot discharge spousal support or child support debt.

Chapter 13

Chapter 13 bankruptcy can help you reduce payments to make them more affordable through a process called “debt reorganization.” With a Chapter 13 debt reorganization plan, you can reduce nearly all debt. Chapter 13 can also discharge many of these types of debt not dischargeable under Chapter 7.

8. Student loans: Many student loans are not dischargeable under Chapter 7.

9. Mortgage debt: Chapter 13 bankruptcy is the right choice if you want to keep your house and prevent foreclosure.

10. Unsecured second mortgage: As an unsecured loan, a second mortgage can be included in a Chapter 13 repayment plan.

11. Debts associated with negligence or breach of contract: If you have committed either of these two actions, which led to a judgment against you, you can discharge that debt with a Chapter 13 bankruptcy, but not a Chapter 7.

12. Debt resulting from willful and malicious damage to property: As long as the actions did not lead to a personal injury or death, you can discharge the debt with Chapter 13.

13. Debts resulting from paying nondischargeable taxes: If you had to go into debt to pay off a nondischargeable tax debt (such as paying your taxes with a credit card), then Chapter 13 can discharge that debt.

14. Certain debts incurred during a divorce or separation property settlement: Domestic support is not dischargeable with bankruptcy. However, during a settlement, if you were assigned another debt, such as a joint credit card, then Chapter 13 can wipe out that debt.

15. Debts unable to discharge in a previous bankruptcy: If you previously filed for a Chapter 7 bankruptcy and were unable to discharge all your debts, then you may be able to eliminate them through filing Chapter 13.

16. Retirement account loans: If you borrow money from your retirement account loan, then you owe a debt to yourself. This debt can be included in your Chapter 13 repayment plan.

17. Post-petition fees for homeowners or condominium association: You can discharge HOA fees under Chapter 13; however, if you want to keep your home, you should continue to make HOA payments during bankruptcy.

18. Some government fines and penalties: Some fines (other than criminal fines) may be dischargeable under Chapter 13. Not many are, so speak to your lawyer about your specific penalties.

19. Older tax obligations: Most tax debt is nondischargeable; however, older income taxes may be discharged if you filed on time and did not commit fraud.

Chapter 11

Chapter 11 business bankruptcy should be considered for debt that does not fall under Chapter 13 or Chapter 7.

20. Business debt and high-asset personal debts: This option is primarily for small business owners, such as a real estate company. Chapter 11 can significantly reduce or eliminate your debt.

 

Get Legal Assistance

If you are unsure how best to eliminate your debt, speak to a lawyer today. An experienced lawyer can help you find the most logical and advantageous way to discharge your debt with the right type of bankruptcy.