What Types of Debt Can Be Discharged in Chapter 7 Bankruptcy?

St. Clair County, AL–If you’re looking to wipe away some or all of your debt, Chapter 7 bankruptcy is a good way to do this. When filing for Chapter 7 bankruptcy, you will be expected to use some of the assets you have to repay your creditors and may also qualify to have the remaining debt discharged.

If you comply with the court’s requirements and your remaining debt qualifies for discharge, it means you get to walk away from the situation as a debt-free individual, and with a clean slate to work with. You can find out more about Chapter 7 bankruptcy by scheduling an initial consultation with a skilled St. Clair County bankruptcy lawyer.

A look at the types of debt a bankruptcy court will allow you to discharge

Debt falls into one of two categories, secured debt or unsecured debt, and may be classified as revolving or installment debt (1). Examples of secured debt include those that are backed by assets. For instance, some lenders may require you to put up your vehicle’s title as collateral before it will lend you money. It can also keep it if you default on your payments.

Unsecured debt, however, does not require collateral and examples include student loans, certain credit cards, and lines of credit that were extended to you by companies like Affirm, AfterPay, etc.

Whether you have secured debt, unsecured debt, or a combination of both, you may be able to get it discharged after you file for Chapter 7 bankruptcy. Here’s an overview of the common types of debt that qualify for discharge through bankruptcy:

Credit card debt
Medical bills
Personal loans, including payday loans
Phone and cable bills

Debts that do not qualify for discharge include (2):

Certain types of tax claims
Damages owed to another party for the “willful and malicious injuries” you caused them to suffer.
Government fines and penalties
government-funded student loans
Some condominium or cooperative housing fees
Child support
Alimony

If you choose to file for bankruptcy, you’ll be required to provide a list of all your creditors and the amount you owe each to the court.

Let a St. Clair County, AL bankruptcy attorney determine whether your debt would qualify for discharge.

If you accrued a significant amount in debt and are looking to have it wiped away, contact Hill, Gossett, Kemp & Hufford, P.C. to schedule a time to speak with an Alabama bankruptcy lawyer. The Alabama bankruptcy attorneys at Hill, Gossett, Kemp & Hufford, P.C. are here to help you understand how the bankruptcy process works and see if you qualify for relief.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11