Deleting Debt Through Bankruptcy

A debt discharge in bankruptcy is the legal release of a person from most of the debts they owe. A discharge in bankruptcy is granted to a person who has filed for bankruptcy protection and has been found to be eligible. A discharge in bankruptcy releases a person from all of their unsecured debts. Secured debts, such as mortgages and car loans, are not usually discharged in bankruptcy.
A discharge in bankruptcy does not release a person from any of their debts that are owed to the government, such as taxes or student loans. It also does not release a person from any of their debts that are owed to a former spouse as part of a divorce decree.
Debts are erased in bankruptcy by order of the bankruptcy court. The order of the court is called an order of discharge. The order of discharge wipes out the debtor’s legal obligation to pay the debts. It also wipes out the creditor’s legal right to collect the debt from the debtor, meaning after the case is over there is no legal obligation to the debt.
However, not all debt are created equal. A nondischargeable debt is a debt that cannot be eliminated in bankruptcy and must be repaid in full, even if the bankruptcy filing wipes out other debts. These debts include:

– Debts owed to the government, such as taxes or student loans

– Debts owed as part of a divorce decree

– Debts that are the result of a fraudulent act

– Debts that are the result of a personal injury caused by the debtor

– Debts for which the creditor has filed a lawsuit against the debtor

– Debts for which the debtor has filed a bankruptcy petition within the last six years

– Child support or alimony payments

Anyone seeking financial help or seeking debt relief should always seek the advice of an experienced Dallas bankruptcy attorney. An attorney can help evaluate options and make the best choice of debt relief for an individual and their family.