There are many benefits of filing for Chapter 7 bankruptcy, including the ability to eliminate some (or all) of the debt that has been dragging you down.
If the time comes to strongly consider Chapter 7 bankruptcy, don’t proceed until you realize what type of debt can be discharged. You should never assume that all your debt will be eliminated, as this is not the case. Here are some debts that are not dischargeable:
- Tax debts and any debts incurred as a means of paying federal taxes
- Any debt associated with false financial statements or fraudulent activity
- Debt that you fail to list on the appropriate Chapter 7 forms
- Debts for child support and alimony
- Debts for specific types of penalties and fines
- Student loan debt
- Debts for death or personal injury caused by operating a motor vehicle while under the influence of drugs or alcohol
These are not the only types of debts that are not dischargeable under Chapter 7 bankruptcy, but they are among the most common.
It’s important to compare the debts that you can discharge to those that you can’t, as this will provide an overview of your situation and a better feeling for if you should move forward.
If you decide that Chapter 7 bankruptcy is the best way to improve your finances, make a list of all your debts so that you don’t overlook anything of importance.
Once you have all the details in order, you can learn more about the Chapter 7 bankruptcy process, your legal rights and the steps you need to take.