Bankruptcy Lawyers
Individuals, partnerships, corporations, or business entities are eligible to receive relief under chapter 7 of the Bankruptcy Code. However, only individuals are eligible to have their debts discharged under Chapter 7. In addition, a discharge of debts is not guaranteed, and there are limits on the types of debt that may discharged depending on your circumstances. Experienced bankruptcy lawyers will be able to recommend the best course of action based on the needs of your unique situation.
After filing a petition for chapter 7 bankruptcy, most collection attempts by creditors against the debtor will be stayed. After filing for chapter 7, the court may determine what debts will be discharged. A discharge “releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor.” It is recommended that individuals consult an attorney as the discharge of debts varies from case to case.
To avoid a denial of discharge, individuals should be sure to keep adequate financial records, be able to explain any inconsistencies in their assets, not commit any bankruptcy crimes, ensure they follow any orders of the bankruptcy court, attend any financial courses prescribed to them, and not tamper with any property that will become property of the estate. Most unsecured debts are discharged under chapter 7. Unsecured debts are debts such as: credit cards, rent, medical bills, etc. Secured debts are dischargeable under chapter 7, however, any attached lien will not be discharged. Secured debts could include things such as your home or vehicle. Secured creditors may retain some rights to secured property even with a discharge. Chapter 7 will also not discharge a lien on a property.
Student loans, while considered unsecured debts, are not dischargeable under chapter 7 unless you are able to show proof you will be unable to repay it in the future. Any debts incurred through fraud or false pretenses are not dischargeable. These types of debts would include any loans secured by providing incorrect information, or accumulating debt without any intent to repay it. Luxury purchases or cash advances of more than $1,000 incurred within 90 days of filing for bankruptcy are typically not dischargeable. Certain tax debts are also not dischargeable. In addition, some lawsuit judgements are difficult to discharge as creditors may file a lean against your property.
Overall, the discharge of debts under chapter 7 varies, and it is best to consult an attorney about your specific situation to see if chapter 7 is best for you. Call Brandy Austin Law Firm, PLLC today to set up a free consultation and learn what your legal options are.
