Chapter 7 bankruptcy, if used properly, can help you discharge many, if not all, of your consumer debts. Unfortunately, Congress decided that some forms of consumer debt are nondischargeable. Legislators wrote the bankruptcy laws, and they have this country in over $30 trillion in debt.
Because these fiscal geniuses have decided that certain debts cannot be discharged and will survive your bankruptcy, you will have to figure out a way to continue paying those debts.
Which Debts Are Nondischargeable?
The most common forms of nondischargeable debts include priority IRS (tax) debt, alimony, spousal maintenance, child support, and many forms of student loans. If you have any of these types of debts, you will need to have an important conversation with your consumer bankruptcy attorney to see whether these debts are dischargeable – or if there is anything you can do strategically to protect yourself moving forward.
How to Find Out Which Debts You Can Get Rid Of
First, you must determine what types of debts you have, and if you don’t have any nondischargeable debts, good for you.
Even if you do have IRS debt or student loan debt, however, you should always seek out your options regarding your other debts. Other debts, like credit cards, gas cards, medical bills, personal loans, etc. are dischargeable under the bankruptcy code. These debts are usually the reason that people file, in the first place.
Many times, people will use Chapter 7 to discharge all their dischargeable debts so that they can focus on paying down the nondischargeable debts.
For example, let’s say you owe the Internal Revenue Service (IRS) $20K from last year’s tax return and $40K in credit cards and medical bills. You may be able to use Chapter 7 to discharge the $40k in credit cards and medical bills and use the money that you were using for those minimum monthly payments to pay off your nondischargeable IRS debt.
Often, people live within their means, charge their credit cards, and pay off their minimum monthly balance. Then, an unanticipated life event occurs, and funds dry up. When this happens, people find themselves making tough decisions.
If things get really bad, they may consider filing for chapter 7 bankruptcy protection to get a fresh financial start.
Why You Should Talk to a Consumer Bankruptcy Attorney
If you find yourself facing a substantial change in circumstances, and your expenses are now exceeding your income, consider sitting with one of our expert consumer bankruptcy attorneys to discuss what your options are.
About half of the people who come to see us believe they need to file for bankruptcy protection. After speaking with us, however, they realize that there are other options available to them.
So, set up a complimentary strategy session with Dellutri Law Group today, and together, we can decide whether filing bankruptcy would be a good financial decision for you and your family.
Call us at (800) 391-4337 or send us a message online to start exploring your options – help is only a call or click away.