#1 Thing To Know Which Debt Can Survive Bankruptcy
If you’re considering filing for bankruptcy, you’re probably wondering which debts can be discharged and which can’t. Bankruptcy is a legal process that allows individuals and businesses to eliminate or repay their debts under the protection of the court. However, not all debts can be discharged, and it’s essential to understand which debts are eligible for discharge before filing for bankruptcy. This article will guide you through the debts that can and cannot be discharged in bankruptcy.
Introduction (Debt) Survive Bankruptcy
Bankruptcy can be an effective solution for those struggling with overwhelming debts. However, bankruptcy does not discharge all debts. Understanding the types of debts that can and cannot be discharged is crucial to making informed decisions about bankruptcy.
What is Survive bankruptcy?
Bankruptcy is a legal process that provides individuals and businesses with relief from debts they can’t pay. The process starts by filing a bankruptcy petition with the court. After filing, a trustee is appointed to oversee the case and ensure that the debtor’s assets are liquidated to pay off creditors. Depending on the type of bankruptcy, some debts may be discharged, while others must be repaid through a repayment plan.
Types of Survive Bankruptcy
There are two primary types of Survive Bankruptcy that individuals can file for Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is also known as liquidation bankruptcy and involves selling the debtor’s non-exempt assets to pay off creditors. Chapter 13 Survive Bankruptcy, on the other hand, is also known as reorganization bankruptcy and involves creating a repayment plan to pay off creditors over a period of three to five years.
Eligibility for Survive Bankruptcy
There are several standards that must be met before a person may petition for bankruptcy. The most important requirement is passing the means test, which determines whether the debtor’s income is low enough to qualify for Chapter 7 Survive Bankruptcy. If the debtor’s income is above the state median, they may have to file for Chapter 13 bankruptcy.
Secured and unsecured debts
Before discussing which debts can and cannot be discharged, it’s essential to understand the difference between secured and unsecured debts. Secured debts are those that are backed by collateral, such as a house or car. If the debtor defaults on the loan, the creditor can seize the collateral to recover their losses. Unsecured debts, on the other hand, are not backed by collateral and include credit card debts, medical bills, and personal loans.
Debts that can be discharged in bankruptcy
Credit card debt, medical expenses, and personal loans are all examples of unsecured obligations that can be discharged in Chapter 7 bankruptcy. Chapter 13 bankruptcy can also discharge these debts, but they must be repaid through a repayment plan. Additionally, some tax debts, such as income tax debts that are more than three years old, may be eligible for discharge.
Debts that cannot be discharged in Survive Bankruptcy
Not all debts can be discharged through Survive Bankruptcy. The following are examples of typical non-waivable debts:
- Student loans: Unless the debtor can prove that repaying the loan would cause undue hardship, student loans cannot be discharged through bankruptcy.
- Taxes: Some tax debts, such as property taxes and payroll taxes, cannot be discharged through bankruptcy.
- Child support and alimony: Debts related to child support and alimony cannot be discharged through bankruptcy.
- Bankruptcy fraud: Debts that result from fraud or misrepresentation cannot be discharged through bankruptcy.
Exceptions to discharge ability
In some cases, a debt may be non-dischargeable unless the creditor takes certain actions. For example, debts resulting from willful and malicious injury to another person’s property or person are typically non-dischargeable. However, if the creditor fails to take legal action within a specific time frame, the debt may become dischargeable.
Filing for bankruptcy can be an effective solution for those struggling with overwhelming debts. However, bankruptcy does not discharge all debts. Understanding which debts can and cannot be discharged is crucial to making informed decisions about bankruptcy. If you’re considering bankruptcy, it’s essential to consult with a bankruptcy attorney to understand your options and navigate the complex process.
What is the difference between secured and unsecured debts?
Debts classified as “secured” have collateral to back them up, whereas “unsecured” do not.
Can student loans be discharged through bankruptcy?
Generally, student loans cannot be discharged through bankruptcy unless the debtor can prove that repaying the loan would cause undue hardship.
Can tax debts be discharged through Survive Bankruptcy?
Some tax debts may be eligible for discharge, such as income tax debts that are more than three years old. However, other tax debts, such as property taxes and payroll taxes, cannot be discharged through bankruptcy.
What happens to non-dischargeable debts in Survive Bankruptcy?
Non-dischargeable debts must be repaid through a repayment plan or through other means, such as wage garnishment or property liens.
Do I need an attorney to file for Survive Bankruptcy?
While it’s possible to file for bankruptcy without an attorney, it’s highly recommended to consult with a bankruptcy attorney to understand your options and navigate the complex process.