The goal of most bankruptcies is to discharge as much debt as possible. You are eliminating your obligation to pay on your late and missed unsecured debts. Bankruptcy is a relatively easy way to get rid of your debt permanently. Another way bankruptcy can benefit you is to stop creditor harassment, and the anxiety associated with excessive debt can also be eliminated.
If you have secured debt such as a home or a car, bankruptcy does offer some protection for those debts. A creditor’s collateral is not affected by bankruptcy unless you pay off those debts being secured by the collateral. After you obtain a discharge, the secured creditor has no right to seek a deficiency judgment or to collect money from you in any way other than by selling the collateral.
Your Chapter 7 discharge will eliminate your unsecured debt, such as credit card debt, personal loans, past utility bills, and medical bills. If your creditors do not object to your discharge, then the court will eliminate your debt without a hearing. Most Chapter 7 cases are completed within three to six months.
Not included in your Chapter 7 discharge are:
- Debts not listed in your original bankruptcy paperwork
- Certain taxes
- Child support
- Most student loans
- Fines and penalties owed to the government
The qualifying debt that is eliminated in bankruptcy will free up some income to pay on the debt that can not be eliminated. Making it easier to get control of your finances.
If you would like to know what debt you can discharge in bankruptcy, contact a Plano bankruptcy attorney to discuss what options you may have.