A bankruptcy discharge releases you from certain types of debts. In short, provided you file for Chapter 7 bankruptcy, you are no longer legally obligated to pay any discharged debts. In addition, a discharge prohibits your creditors from taking any action on such obligations like collection or communication pertaining to the debts. Although you are not liable for discharged debts, some debts will remain after your bankruptcy, and you need to plan ahead.
Before filing for bankruptcy, it is important to review your debts to know where things stand afterward. It will go a long way in ensuring that you get back on your feet.
Types of dischargeable debts
Not all debts are eligible for discharge. It all depends on the nature of the debt. In addition, the dischargeable debts depend on the chapter of the bankruptcy code, and some exceptions may apply. Dischargeable debts include medical bills, credit card debt or personal loans. On the other hand, debts that cannot be discharged include alimony, child support or court fees, and penalties.
You need to disclose all your debts
Disclosing all your debts and financial position when filing for bankruptcy is very important. If you fail to disclose any debt or financial obligation, it cannot be discharged, and you are legally obligated to pay it. In addition, it is advisable to learn more about bankruptcy laws to protect and safeguard your interests.
Navigating the sometimes complex bankruptcy process can seem overwhelming, but you can make informed decisions and end up in a better place with the correct information in hand. Filing for bankruptcy should not leave you destitute and hopeless. If anything, it should help you bounce back and get your finances in order.