Many Americans are struggling under mountains of debt for various reasons. With the continuing fallout of the subprime mortgage crisis and the high unemployment rates, many people have found themselves facing seemingly insurmountable credit card debt with high interest rates and impossible monthly payments. In addition, many families cannot afford to pay out of pocket for college, so they take out tens of thousands of dollars in student loans simply to provide more opportunities for their children. Other people may be subject of a court judgment that they cannot afford to pay.
Instead of continuing to struggle with high debt payments and garnished wages, many people turn to Chapter 7 bankruptcy as a solution. Simply put, Chapter 7 bankruptcy wipes out—or “discharges”—your debts and allows you to start over with a clean financial slate. Not every type of debt is dischargeable in a Chapter 7 bankruptcy, however, and an experienced Missouri bankruptcy attorney can help you decide whether Chapter 7 is right for your particular situation.
Types of dischargeable and nondischargeable debt
Some of the debts that are commonly discharged in Chapter 7 bankruptcy include:
- Credit card debt, including late fees and past due payments
- Past due utility bills
- Civil court judgments
- Medical bills
- Other collection accounts
- Past due rent
- Unpaid taxes (under certain circumstances
- Social Security, disability, and veterans’ assistance overpayments
- Business debts
- Personal loans from employers, family, or friends
- Repossession balances
Not all of these debts are dischargeable in every situation, so each case will have to be evaluated on an individual basis.
Some debts that are never dischargeable in a Chapter 7 bankruptcy include:
- Child support or alimony
- Student loans (except under very rare circumstances)
- Some taxes
- Judgments that arose from a drunk driving personal injury case
- Debts incurred by fraud
- Criminal restitution and other court fees
- Government fines and penalties
- Debts that are not listed in your bankruptcy filing
Every debt situation is different, so it is always best to consult with an experienced Missouri bankruptcy lawyer to help you find the right solution for you. If you are considering bankruptcy, call the Law Office of Kenneth P. Carp at 636-947-3600 for a free consultation today.