An individual may carry several different categories of debt when navigating the Chapter 7 bankruptcy process. The courts can discharge some, while others will remain after your case closes.
If you have questions about how the court will treat your primary debt in Dallas Chapter 7 personal bankruptcy cases, Allmand Law Firm, PLLC could provide you with answers. We could review your petition and schedules and outline exactly what obligations might be dischargeable. Call our seasoned Chapter 7 bankruptcy attorneys for help today.
Dischargeable Debts
The primary goal of filing for Chapter 7 personal bankruptcy in Dallas is to discharge your debts. A discharge means that you are no longer personally liable for the money you owe to your creditors. It is important to note that not all types of debt are dischargeable through the bankruptcy system.
Dischargeable debt is generally an obligation that is not secured by something you own. Some of the most common examples include:
- Medical debt
- Past-due rent
- Payday loans
- Unpaid utilities
- Credit card bills
- Unsecured personal loans
Our attorneys could review all of your debts before advising you on what might be dischargeable in bankruptcy court.
Non-Dischargeable Debts
Chapter 7 personal bankruptcy does not eliminate all kinds of debt. Certain types of debt are generally non-dischargeable and will remain your responsibility after the case is closed.
Taxes
Certain tax debts, especially recent income taxes, are typically non-dischargeable. Older tax debts may qualify for discharge only under specific conditions, but it is never safe to assume that is the case without first speaking to a lawyer.
Student Loans
Student loan debt is rarely discharged in Chapter 7. You may have an opportunity to discharge your loans if you can establish that you are facing an undue hardship, but this is a difficult legal standard to meet.
Criminal Restitution
Fines, penalties, and restitution related to criminal convictions are never dischargeable in bankruptcy. You must pay them in full and can still face consequences for failing to pay long after your bankruptcy case comes to an end.
Domestic Support Obligations
Child and spousal support obligations are entirely non-dischargeable. These debts remain enforceable, so you must pay them regardless of your bankruptcy filing.
A Dallas lawyer could help you navigate primary debt in a Chapter 7 personal bankruptcy case, avoid costly mistakes, and plan for a clean financial fresh start.
What Is a Secured Debt?
Secured debts are loans that are backed by collateral, or property that the lender can take if you fail to repay the loan. Arguably, the most common example is mortgages securing real estate. Dallas Chapter 7 personal bankruptcy treats secured debts differently from unsecured debts. While your personal obligation to repay the debt may be discharged, the lender’s right to reclaim the collateral remains.
This means that to keep your home or car, you must continue making payments or consider reaffirming the debt. If you fall behind, the lender can still foreclose or repossess the property, even after your bankruptcy case is closed. However, Chapter 7 can eliminate any deficiency balance if the lender takes the property and sells it for less than you owe. It is important to understand your secured debts before filing to avoid unintentionally losing essential property.
Discuss Primary Debt in Chapter 7 Personal Bankruptcy With a Dallas Attorney
Having a clear understanding of what will happen to your primary debt in Dallas Chapter 7 personal bankruptcy cases is important so you know exactly what is required for a fresh financial start. While the rules surrounding discharge are complex, our attorneys could help you navigate the process. Call Allmand Law Firm, PLLC today to learn more.
