What Debts can be Discharged in a Chapter 7 Bankruptcy

Do you have a lot of debt? While most Americans have some debt from credit cards and loans, some have more debt than others. If it feels like you are going to have debt forever because you are having such a difficult time paying it off, you might want to consider the option of filing for bankruptcy. In the past, people may have made you believe that filing for bankruptcy was a bad thing because it leaves a mark on your credit report for several years. While it is true that bankruptcy will show up on your credit report when you are applying for different things, that does not mean that it is a bad thing. It may be the absolute best way for you to pull yourself out of a difficult financial situation.

If you are serious about filing, you may believe that Chapter 7 is the way to go. When filing Chapter 7 bankruptcy, you would not have to get on a payment plan like you would if you were filing Chapter 13. Rather than getting on a payment plan and still paying back some of what you owe, you would simply need to sell certain assets to get the money that would then get sent to your creditors. Several assets are exempt from the sale, including your home and your personal vehicle. If you do not have additional assets to sell, you can still file a Chapter 7 bankruptcy to get out of debt. You should know exactly which debts can be discharged during the Chapter 7 bankruptcy process.

Medical Bills

Do you have a lot of debt from doctor’s offices and hospitals? You might not have had insurance or your medical insurance might not have covered all the medical expenses you have recently incurred. The truth is that medical expenses are often ridiculously high. You may have received bills from the hospital for thousands of dollars. It is not always possible for people to pay off the medical debt that has accumulated over the span of several months or years. Unfortunately, when medical bills go unpaid, they are often sent to a collection agency.

Once the debt gets sent to the collection agency, that agency will call you and attempt to get in contact with you in a lot of different ways. It is frustrating to get constant calls from debt collectors who expect you to come up with thousands of dollars. They may have even tacked on interest to the original payment, causing you to owe much more than you initially did when you first received those medical bills. While this is a frustrating thing to deal with, especially when you need medical care for ailments and conditions that you might have, filing Chapter 7 bankruptcy could help you get your medical debt discharged.

Credit Card Debt

Do you have a lot of credit card debt? When you first applied for a credit card, you probably did so because you wanted to establish some sort of credit. It is important to have decent credit to get approved for things, such as car loans, apartments, homes, and more. While you likely had the best intentions, things may have slowly gotten out of control. If you applied for a few too many credit cards and started using them a bit too often, it was likely hard for you to make payments on each of those cards every month.

When you miss a payment on a credit card, the credit card company will typically charge a late fee right away. The late fee will make the monthly minimum increase by a certain percentage, making it even harder for you to make a payment. Keeping up with different credit card payments can quickly become confusing and frustrating. You might have unintentionally missed a payment only to realize you are now being charged more than what you owed because of that mistake on your behalf.

It is often hard to get out of credit card debt because the credit card companies continue to collect interest on what you owe. When you add interest and late fees, it may be impossible for you to pay off any of your credit cards while staying current with your utility bills and rent or mortgage payments. If you have not been able to keep up with your credit card payments and you are receiving a lot of harassing calls from debt collectors, it will all come to a stop when you file for Chapter 7 bankruptcy. The debt collectors are required to stop contacting you as soon as you file. You can have your credit card discharged by filing in this manner, too.

Utility Bills

Did you fall behind on your utility bills? When you are living paycheck to paycheck or trying to pay off some of your debt while still affording the cost of living, it is hard to keep up with all of your bills. If you had to choose between paying the rent or paying the electric bill, you may have chosen the rent because you know that you need to have a place to stay. No matter your reason for falling behind on the utility bills, there is a possibility that the utility company sent the bill to collections. Not only does this leave a mark on your credit report, but the collection agency that has taken over the debt may call you repeatedly because they are attempting to get you to pay the money back.

It is frustrating to know that the utility company sold off the debt to a collection agency that is now threatening you to get you to pay them. No one wants to receive those kinds of calls. However, you will be relieved to know that filing Chapter 7 bankruptcy means putting a stop to those calls and having this type of debt discharged. It does not matter if you owe money from the electric supplier, gas company, or even the water company – any debt that you owe to the utility companies is discharged after you have filed for Chapter 7 bankruptcy and have gone through the bankruptcy process.

You can have most of your debt discharged when you file a Chapter 7 bankruptcy. The types of debt that would not get discharged include student loans, child support payments, certain types of debts owed to the IRS, and any fines you might owe from doing something that is against the law. An attorney would let you know of any other debt that might not get discharged during the bankruptcy process.

Need to File for Chapter 7 Bankruptcy? Get Help From an Experienced Attorney

Do you feel like you will never get out of debt? Does it seem like it is impossible for you to get out of this financial rut? If you want to get a new start with your finances, you should think about filing Chapter 7 bankruptcy to have most of your debt discharged. Before starting the filing process, make sure to have an expert bankruptcy attorney on your side to guide you through it all. At Bouloukos, Oglesby & Mitchell, we are prepared to help you get the fresh start you need while getting rid of your debt. Contact us today at 205-352-4205 to schedule your free consultation with us.