Different Types Of Debt According To Chapter 7 Bankruptcy

http://www.beustring.com/Chapter 7 bankruptcy offers debtors who are in dire financial straits an opportunity to discharge a large amount of their debt, meaning they are no longer deemed legally responsible for repaying that debt. However, Chapter 7 bankruptcy does not allow a person to discharge all of their debts. Only certain debts, known as dischargeable debts, can be forgiven, while others, known as non-dischargeable debts, must still be paid.
Dischargeable Versus Non-dischargeable Debts
According to the United States Bankruptcy Code, only certain types of debt may be discharged. The following represent some of these classes of debt:

  • Credit card debt
  • Personal loans
  • Certain bills, like medical bills and utility bills
  • Past due rent
  • If you file for Chapter 7 bankruptcy, it is likely that any of the above types of debt that you have will be forgiven.
  • Non-dischargeable

For a variety of reasons, there are some debts which are not able to be eliminated through bankruptcy. Though there are others and there are some exceptions to the types of debt listed below, these may be regarded as generally unlikely to be discharged:

  • Child support
  • Taxes
  • Student loans
  • Damages compelled by a personal injury lawsuit award

Though it is frequently unnecessary, in some Chapter 7 cases an individual or business will be required to expose some of their assets to bankruptcy sale in order to generate proceeds with which to pay creditors. An experienced attorney can frequently insulate most of a debtors possessions from this, however. In order to gain a better understanding of Chapter 7 bankruptcy, dischargeable and non-dischargeable debts, and bankruptcy exemptions, speak with a Houston bankruptcy attorney today.