Debts that Can be Discharged in Chapter 7 Bankruptcy

Before making any major financial decisions, it is critical that you have all the information you need to make the right decision for you. The same is true when it comes to filing for bankruptcy. You need to know how this legal process works as well as its pros and cons. An experienced California bankruptcy attorney can help you understand everything a bankruptcy filing entails and how it may or may not be beneficial in your specific circumstances. 

What is Discharged Debt?

When your debt is discharged, this means that you are no longer legally responsible for paying it. Creditors may not contact you about paying the discharged debt or take any legal actions to collect your debt and can get into legal trouble if they do. Discharged debts must also be removed from your credit report and will no longer negatively impact your credit score. You are relieved of financial responsibility for debts that are discharged in bankruptcy. Your California bankruptcy attorney can help you make sure all of your debts are listed on your bankruptcy petition, so you can receive the discharge you are entitled to under the U.S. Bankruptcy Code.

Dischargeable Debts in Chapter 7 Bankruptcy

One of the first pieces of information you should know about is debts that can be discharged in a successful bankruptcy filing. Debts that are eligible to be discharged in a chapter 7 bankruptcy are generally unsecured debts and include:

• Personal loans from friends, family, and employers
• Credit card balances (to include over-limit and late fees)
• Accounts placed with collection agencies
• Medical bills
• Past utility bills 
• Dishonored checks (unless they involve fraud)
• Attorney fees 
• Revolving charge accounts 
• Student loans (only in the rare case that you can prove undue hardship if you have to pay them)
• Business debts
• Debts created by lease agreements and past due rent
• Civil court judgments (unless they involve fraud)
• Deficiency balances for repossessions
• Auto accident claims (unless they involved drunk driving on your part)
• Tax penalties and unpaid taxes (only if they are of a certain age)
• Social security overpayments
• Veterans assistance loans and overpayments

Keep in mind that any fraud, criminal activity, or misconduct in connection with any of the debts mentioned above can make them so they cannot be discharged. If this applies to any of your debts, you should disclose that information to your California bankruptcy lawyer as soon as possible. 

Get the Help You Need by Calling a Knowledgeable California Bankruptcy Attorney

If left unpaid, debts can make your life miserable. A chapter 7 bankruptcy could be the answer for a fresh start to your finances. Take the first step in discharging your debts and meet with a skilled California bankruptcy lawyer.

The legal offices of Miranda, Magden & Miranda, LLP, are conveniently located in both Monterey and Salinas, California. We serve clients in the counties of Monterey, Santa Cruz, San Benito, and Santa Clara, and in the U.S. Districts of Northern and Eastern California. Contact us today to schedule your free bankruptcy consultation.