Discharging Debt With Chapter 7 Bankruptcy

Fishback Law Corporation helps consumers find effective debt relief from a wide variety of debt through a Chapter 7 bankruptcy in Orange County and throughout Southern California, including hospital and doctor’s bills, credit card bills, and other types of unsecured debt. We analyze each client’s unique situation and advise them on the likely outcome of a Chapter 7 proceeding, including which debts may be discharged and which may not be dischargeable in Chapter 7 bankruptcy.

Nondischargeable Debt

It is important to note that not all debt is dischargeable under Chapter 7. The list below includes some of the more common types of debt people carry that cannot be discharged in bankruptcy, but it is not a complete list. You should discuss your entire financial situation with your Orange County attorney so that you have a thorough understanding of what Chapter 7 bankruptcy can and cannot do for you.

  • Student loans
  • Child support
  • Spousal support
  • Some tax debts, including certain federal and state income tax, and estate and gift tax
  • Some judgments, such as for willful and malicious injury to person or property, or personal injury caused while driving under the influence
  • Debts which you fail to include in your bankruptcy filing may not be dischargeable

Some of these debts can still be discharged if the creditor doesn’t raise the issue. Also, some debts that cannot be discharged under Chapter 7 can be discharged under Chapter 13 in whole or in part. Even if you cannot get a complete discharge of all of your debts, Chapter 7 can likely help you so significantly that you will be able to comfortably meet any financial obligations remaining.

Secured Debt

A secured debt is one that is “secured” by some underlying property. Usually, this is when you take out a loan and put up some valuable property as collateral, meaning that if you do not repay the loan on time, the lender has a right to take the property as payment of the debt. If you have secured debt, such as a home mortgage or car loan where the car is collateral for the loan, keep in mind that even if you get the debt discharged, the creditor may still be able to take the property securing the loan if payment is not made on the respective debt. It may be better in these cases to file Chapter 13 instead of Chapter 7 to save the property from foreclosure or repossession.

Another option is that you can reaffirm a debt in bankruptcy, meaning that it will not be discharged, and you will still be responsible to pay it, but you will not risk losing the asset. You could do this for any secured debt or any other debt that you wanted to repay despite the bankruptcy. There may be benefits outside of bankruptcy for reaffirming a debt, as well.

Knowledgeable Personal Bankruptcy Attorneys

Chapter 7 is most helpful for people with large amounts of unsecured debt. The following types of debt are some of the most common forms that Chapter 7 can help with:

  • Medical debt
  • Credit card debt
  • Tax debt
  • Wage garnishments
  • Judgments

If you have these types of debts and you qualify, Chapter 7 may be the solution to free you from the stress and burden of overwhelming debt. Chapter 7 is also available for businesses that cannot meet their obligations and continue in business. Business owners who want to close up shop without worrying about being continually hounded by their creditors should consider a business bankruptcy under Chapter 7. We can help you determine whether Chapter 7 is right for you and represent you through the entire process, from filing the petition to discharge and beyond.

Contact Our Skilled Legal Team For Guidance Today

For immediate assistance and personal representation in a Chapter 7 consumer or business bankruptcy in Orange County, email Fishback Law Corporation or call 949-274-7080 to reach our office in Irvine for a free consultation.