Debt types that can be included in a chapter 7 bankruptcy
Bankruptcy is designed to help people who are struggling with a debt burden they cannot pay get out of debt and get a fresh start. Most types of debts may be included in bankruptcy. Many of the type of debts that may be included in bankruptcy is the same no matter if you are filing Chapter 7 or Chapter 13 bankruptcy. A chapter 13 bankruptcy is a “Reorganization” type of bankruptcy. Meaning that many of the debts discharged in a chapter 7 are repaid through a chapter 13 bankruptcy plan. An attorney will help you setup a chapter 13 repayment plan. A bankruptcy attorney should be used to ensure all eligible debts are included in the bankruptcy.
Types of debt that can be included:
Secured Debts
Debts secured by property may be included in a bankruptcy. These loans are backed up by the value of the loan. Lenders may proceed with foreclosure proceedings if you stop making payments on the property. A bankruptcy can halt foreclosures for the short term but eventually the property will be discharged or you will be entered into a new payment plan for the property. Lenders will work to keep property out of a bankruptcy as much as possible.
Medical Debt
Medical and dental debt may be included in a bankruptcy proceeding. Each debt will be included individually in the bankruptcy to ensure that that it has the proper discharge.
Credit Card Debt
Most credit card debt is considered unsecured debt and therefore it is discharged as such in a bankruptcy. Some lenders may dispute the claim and try to repossess assets purchased with the credit. This usually happens with high end electronics or jewelry or another large purchase.
Non-Dischargable Debt
Court fines and fees, student loans, tax debt, fraudulent debt, child support and alimony are types of debt that are non-dischargable. Any debt incurred to pay off a non-dischargable debt is also deemed non-dischargable. These debts must be paid in full.
To find out more about debt types that can be included and to discuss your particular case call The Law Offices of Jill McDonald today and setup your free consultation.
