You must understand that declaring bankruptcy may not get you completely off the hook for all your outstanding financial obligations. That is, regardless of whether you are filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you may still have to pay back certain creditors. Follow along to find out whether you can have all your debts erased and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you figure out which debts to disclose in your bankruptcy lists and schedules.
Am I able to have all my debts erased in a Chapter 7 bankruptcy?
While you cannot have every last debt erased in your Chapter 7 bankruptcy proceedings, you may still have the opportunity to benefit from significant financial relief. This is because a Chapter 7 bankruptcy recognizes certain debts are dischargeable debts, which are types of debts that may be eliminated from your immediate liability. Namely, these dischargeable debts may include your credit card debts, your outstanding medical bills, your personal loans from loved ones, and your overdue utility bills.
However, you may not be able to have every last debt erased in your Chapter 7 bankruptcy proceedings. This is because there are also recognized nondischargeable debts, which are, contrastingly, types of debts that may not be eliminated from your immediate legal obligations. Examples may include your student loan debts, your child support and spousal support payments, your federal/state/local taxes, and the money you borrowed to pay for your federal/state/local taxes.
Am I entitled to a debt discharge in a Chapter 13 bankruptcy?
Unfortunately, the debts you may be entitled to discharge in a Chapter 13 bankruptcy may be more limited than what is offered through a Chapter 7 bankruptcy. Rest assured, debts from your willful and malicious injury to property, debts from paying nondischargeable taxes, and debts from divorce property settlements may still be erased. But such erasure may only be possible under the following circumstances:
- You must prove that all your domestic support obligations are up to date.
- You must prove that you have not received a discharge in a prior Chapter 7 or 13 bankruptcy case filed within the past four or two years, respectively.
- You must prove that you have completed your approved Chapter 13 repayment plan schedule.
To reemphasize, these eligible debts may not be discharged until after the completion of your repayment plan. But if extenuating circumstances require you to obtain this relief sooner, then you may file for a hardship discharge with the Kentucky bankruptcy court. Essentially, a hardship discharge argues that circumstances beyond your immediate control have inhibited you from completing your repayment plan; and a modification to your repayment plan may not be an adequate solution.
Without a doubt, your next step should be to employ a talented Louisville, Kentucky consumer bankruptcy lawyer. So please reach out to us at Schwartz Bankruptcy Law Center immediately.
