State bankruptcy regulations are governed primarily by federal law. However, when filing for bankruptcy, you can choose between federal exemptions or state-specific exemptions. When the court issues you a bankruptcy discharge, it releases you from all liability for the debts included in your petition for relief. That means creditors may no longer take legal or collection actions against you to collect the outstanding debt.
It is essential to note that not all debt is eligible for discharge, and knowing the difference between dischargeable and non-dischargeable debt in Dallas is crucial for protecting your interests. Contact Allmand Law Firm, PLLC today to speak with our credible bankruptcy attorneys.
Understanding Discharge
Bankruptcy discharge is a court order that permanently relieves an individual from any liability for specific debts. According to 11 United States Code § 727, unless there are issues requiring litigation, such as objections from creditors, the individual or couple filing for relief will typically receive a discharge automatically. Once received, the order stops creditors from taking any action, including collections, lawsuits, or wage garnishments, on the discharged debt.
However, the release from liability does not eliminate valid liens already in place on properties, so creditors may still have the authority to seize property for that debt if it is not paid in full. While a lot of debt is dischargeable in Dallas, there is also non-dischargeable debt that the bankruptcy action cannot eliminate.
What Are the Common Dischargeable Debts?
Some examples of dischargeable debts include the following:
- Unsecured balances from credit cards
- Personal loans taken through private lenders
- Unsecured loans backed by collateral, such as real estate
- Utility bills, including outstanding electric, water, and phone bills
- Medical bills and collections, including debt owed to hospitals and doctor offices
- Older tax bills, such as federal or state taxes over three years old, if the debtor filed their tax returns on time
Our attorneys at Allmand Law Firm, PLLC, are seasoned in handling Dallas bankruptcy cases of all types and could answer your questions about dischargeable and non-dischargeable debt.
What Are the Common Non Dischargeable Debts?
Unlike dischargeable debt, non-dischargeable debt survives the bankruptcy and remains collectable after discharge, regardless of which type of bankruptcy the individual files for in Dallas. Some examples are recent tax bills, student loans, and child support and alimony, including payments in arrears. While there may be relief available for student loans, particularly if they are federal, it is the most challenging type of debt to discharge.
Fraud-related debts, such as money obtained through embezzlement, are also non-dischargeable. Other criminal or personal injury debt is also exempt from discharge in bankruptcy, meaning the relief does not eliminate the outstanding debt, and the debtor remains responsible for repayment.
Non Dischargeable Secured Debts
While the individual’s personal liability for secured debt, such as mortgages or car loans, may be dischargeable through the bankruptcy action, if there are already liens on the property, they may remain in place. After bankruptcy discharge, the creditor may resume action to repossess the property if the debtor fails to make payments as required under the agreement.
A knowledgeable lawyer can review your debts and help you explore strategies to protect your assets.
Talk to a Dallas Lawyer About Dischargeable Versus Non-Dischargeable Debt
Navigating the bankruptcy court process is challenging, regardless of which type of relief you file for or if you file solely, jointly, or as an individual or business. A strong understanding of the guidelines and requirements is essential for completing the process and receiving discharge from the court without any surprises, such as remaining debt you thought was included in the action.
Call Allmand Law Firm, PLLC today for help with your case and understanding dischargeable and non-dischargeable debt in Dallas. Contact our office today to schedule an appointment.
