Chapter 7 Bankruptcy Guide
Filing for bankruptcy can provide significant financial relief by eliminating certain types of debts, also known as "dischargeable" debts. However, not all debts can be discharged in bankruptcy. Below, we explore which debts can and cannot be eliminated through bankruptcy in Florida.
Dischargeable Debts
Most unsecured debts can be discharged in both Chapter 7 and Chapter 13 bankruptcy. Unsecured debts are those not backed by collateral. These may include:
Credit Card Debt: This is one of the most common types of debt that bankruptcy can eliminate. It includes both the principal amount and any interest or fees.
Medical Bills: If you have accumulated significant medical debt, bankruptcy can potentially eliminate these debts.
Personal Loans: Loans from friends, family, and others can generally be discharged in bankruptcy.
Student Loans: While it was once challenging to discharge student loan debt through bankruptcy, new guidelines make it easier. If you are considering bankruptcy with student loan debt, please contact us today.
Certain Older Tax Debts: Income tax debts may be discharged under specific circumstances, usually for taxes that became due more than three years before the bankruptcy was filed.
Utility Bills: Outstanding utility bills can often be discharged through bankruptcy.
Non-Dischargeable Debts
Certain types of debt are generally non-dischargeable, meaning they can't be eliminated through bankruptcy. You will most likely still be responsible for these debts after filing for bankruptcy. They include:
Alimony and Child Support: Debts for alimony or child support obligations cannot be discharged in bankruptcy.
Certain Tax Debts: While older income tax debts can sometimes be discharged, other tax-related debts, such as recent property taxes and tax liens, cannot be discharged.
Fines and Penalties to Governmental Units: Fines, penalties, and forfeitures to governmental units, including traffic tickets and criminal restitution, are not dischargeable.
Debts for Personal Injury Caused by Driving Under the Influence: If you caused personal injury or death to someone while driving under the influence, these debts cannot be discharged.
What About Secured Debts?
Secured debts are those backed by an asset, like a home mortgage or auto loan. While bankruptcy can eliminate your obligation to repay the debt, it doesn't eliminate the lender's right to take the collateral. If you want to keep the house or car by securing the loan, you'll generally need to continue making payments.
Bankruptcy laws are complex, and the dischargeability of certain debts can vary based on the specifics of your situation. Consulting with a knowledgeable bankruptcy attorney can help clarify which of your debts can be eliminated by filing for bankruptcy in Florida.
Disclaimer: This information is not intended as legal advice. Please consult a legal professional for advice pertaining to your specific situation.
