Most people file for bankruptcy for the purpose of clearing their debts so they can start a new life with a clean slate. Though some people have a mistaken notion that all debts and payables will be discharged, this is actually not true. Even if you file for a chapter 7 bankruptcy and claim in front of the judge that you don’t have even a single dollar, the non-dischargeable debts must still be paid. However, there have been some extraordinary circumstances that all of the person’s debts were discharged, but still, it takes very extra ordinary circumstances.
Being an attorney that handles these types of cases is not considered the most glamorous type of law, but it can still make you a great living if done properly. Here’s a bit more about the professional and what it entails.
What does a Chapter 7 bankruptcy lawyer do?
When a debtor has been given discharge by the court from his/her debts, it would mean that the debtor won’t have to pay his debts to the creditors. Legally, he can’t be forced to pay and the creditors will also have to stop collecting from him. However, secured debts or debts that were made through a valid lien will be enforceable. Therefore, if the creditor chooses to enforce the lien, he will be able to do so legally.
Discharges are usually given to debtors once the filing of bankruptcy chapter 7 has been resolved or 60 days after all of the creditors involved in the case has had the chance to meet during the “Meeting of Creditors” which is required and is a part of the bankruptcy process.
Debts that can be discharged
Here is the list of dischargeable debts:
- Credit card debts – debts acquired through credit cards along with the interest are discharged.
- Unpaid medical bills – bills acquired from hospitalization, rehab, treatment and others are discharged.
- Personal loans – Loans or debts made to friends, family members and others are also discharged.
- Utility bills – Only unpaid past utility bills are discharged.
- Dishonored checks – dishonored checks are discharged unless the dishonored checks were made for fraudulent reasons.
- Business debts – If you are a small business owner and have acquired debts to finance your business, those debts can be discharged as well.
- Due rent – Unpaid rents in the months before you have filed for bankruptcy will be discharged.
- Attorney fees – Unpaid attorney fees in the past can also be discharged.
- Car accident claims – As long as the car accident was not because of a DUI charge against you, it can be discharged.
- Social security over payments and veterans assistance loans and overpayments
- Collection agency – Collection agencies that collect your debts from other creditors will also have to stop collecting from you.
Chapter 7 bankruptcy usually discharges most, if not all, of your debts. However, if the court finds that any of your dischargeable debts were incurred based on fraud, they may still decide that you pay for them. When you file for chapter 7 bankruptcy, you will have the chance to tell the judge how you have acquired your debts and why you are not able to pay for them. It is advised that during that time, you must be very honest and straightforward and tell the whole story. The judge might be more sympathetic towards you and your circumstance.