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Can you discharge all your debt in Chapter 7 bankruptcy?

If you find yourself in a bad financial situation, you may turn your attention to Chapter 7 bankruptcy. As you learn more, you'll come to find that you can discharge some of your debt with the idea of getting your finances back on track and starting fresh.

While there are definite benefits of Chapter 7 bankruptcy, including the ability to eliminate most of your debt, remember this: Some types of debt are immune to Chapter 7 bankruptcy, meaning that you'll still be responsible for them after your filing.

You need to take these debts into consideration, as it's imperative to have a plan for paying them in the future. The following types of debt are not typically discharged in a Chapter 7 bankruptcy filing:

  • Any debts not listed on your Chapter 7 bankruptcy schedule filed with the court
  • Student loans
  • Local, state and federal taxes
  • Child support
  • Spousal support (also known as alimony)
  • Court fees
  • Any debts resulting from wrongful death or personal injury damages associated with drunk driving
  • Debt associated with fraud

A closer look at student loans

Many people struggle with student loan debt. In fact, they have so much student loan debt that they find it difficult to make ends meet.

Even though educational loans are not typically discharged by a Chapter 7 bankruptcy filing, this is not always the case. You may be able to get the court to agree that the debt is causing an undue hardship. To qualify, the court will look at three things:

  • Income
  • Duration
  • Good faith (an effort to have paid back the debt)

You shouldn't assume the court will allow you to discharge your student loan debt, but if it's placing an undue hardship on your finances it's something to look into.

As you learn more about Chapter 7 bankruptcy, you'll realize that the benefits outweigh the potential drawbacks. This holds true even if you have some debts that you can't discharge.

Once you have a clear idea of how to proceed and what you'll get when you file, you can move forward with the process. Doing so with the appropriate knowledge will have you feeling good about your decision every step of the way.

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Richoux Law Firm, L.L.C.
110 E. Kaliste Saloom Road
Suite 205
Lafayette, LA 70508

Toll Free: 888-327-5740
Phone: 337-205-7049
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