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At Bishop & Associates, L.L.C., one of the most common questions we receive from clients is, "What is dischargeable in bankruptcy?" Although bankruptcy eliminates most debt, there are a few debts that will not be discharged.
To discuss your financial situation with one of our experienced Fort Collins, Colorado, bankruptcy attorneys, call 866-599-1897 or contact us online to schedule a free consultation.
Unsecured Debt
Bankruptcy is a great tool for wiping out unsecured debt such as credit cards, medical bills, payday loans, bank overdraft fees and lines of credit. In a Chapter 7 bankruptcy, all of your unsecured debts will be discharged. If you file for Chapter 13 bankruptcy, you may have to pay back some or all of your unsecured debt over three to five years in a repayment plan.
Unsecured debt that is not dischargeable in bankruptcy includes:
- IRS tax debt
- Spousal maintenance and child support
- Student loans, unless you do not have the ability to repay over your lifetime such as a disability that prevents you from working
- Fines related to crimes such as traffic tickets
Secured Debt
Because secured debt is backed by collateral, it is more complex to handle in bankruptcy than unsecured debt. If you cannot afford your home or car, you can give the property up and have your debt discharged in a Chapter 7 bankruptcy. If you wish to keep your property and you are able to stay current on the payments, you may be able to reaffirm the debt with the lender and keep the property in a Chapter 7 bankruptcy.
In Chapter 13, you can keep the property as long as you stay current on the payments and repay your debt over a three- to five-year time period. Another option available through Chapter 13 is called lien stripping. If the value of your home is less than the second mortgage or HELOC, you may be able to strip off the second or subsequent mortgages and may have only the first mortgage to pay.
There are many factors to consider when determining whether Chapter 7 or Chapter 13 is the right option for your unique situation. Our lawyers will assess your financial situation and guide you through your various options.
Contact a Larimer County Dischargeable Debt Attorney
To discuss your financial situation with one of our attorneys, call 970-672-1038 or toll free at 866-599-1897. You may also contact us online.
