If you are thinking about filing bankruptcy, but wonder whether the types of debts that you have will be forgiven by the court you are not alone. Debts that can be forgiven by the courts are called "dischargeable."
Types of debts that ARE dischargeable through Bankruptcy:
1. Credit Card Debt: This is the most common type of debt that is discharged (or wiped clean) through bankruptcy. It is often the greatest source of headache for individuals who are going through financial problems. Most bankruptcy attorneys will start fielding harassing creditor calls with a small down payment on your case. These are easily dischargeable.
2. Personal loans: Even debts to family members are discharged through a bankruptcy. This may actually cause problems for prospective applicants for bankruptcy protection. Any payments made to these "creditors" in the months proceeding a bankruptcy filing will have to be paid back by the creditors to the court to be fairly distributed among all the creditors.
3. Secured debts: Debts secured by an item like a house or car can be discharged if the item is returned to the creditor. Normally, if you walk away from a house or car, the creditors will sell the item at auction and come after the debtor for a "deficiency balance." This is not true when you file for protection under the bankruptcy code. These deficiency balances will go away.
If you qualify, you can sometimes "strip" second or third mortgages from your property through a Chapter 13 bankruptcy so that only the first mortgage remains. With the downturn in the economy and the deflated prices of homes, this type of relief has been utilized a lot.
4. Attorney's fees: Debts that you owe to attorneys are discharged in a bankruptcy.
5. Doctor's fees: These debts, too, are discharged through a bankruptcy.
Types of debts that are not discharged through bankruptcy:
1. Student loans: For some reason, the legislators have declared that student loans are not dischargeable. There are "hardship discharges" that can be applied for, but these are nearly impossible to qualify for.
2. Fraudulent debts: It is very hard for your creditors to prove that a debt is fraudulent, unless the debt was acquired a short time before filing. If you have made good faith payments on most of your debts, then chances are pretty good that a creditor will not even try to challenge the validity of the debt, since it is such an uphill battle.
Note: This is only for general information. You should contact an attorney with questions about specific debts. There are times when these general rules do not apply. There are exceptions to every rule. This is probably why an attorney's favorite response to every question is "depends."
This article has been provided by Patricia Ashcraft, a Murrieta, CA bankruptcy attorney that has been serving Riverside and San Bernardino Counties for over fifteen years.
Article Source: http://EzineArticles.com/?expert=Patricia_M_Ashcraft
Article Source: http://EzineArticles.com/7667806
Types of debts that ARE dischargeable through Bankruptcy:
1. Credit Card Debt: This is the most common type of debt that is discharged (or wiped clean) through bankruptcy. It is often the greatest source of headache for individuals who are going through financial problems. Most bankruptcy attorneys will start fielding harassing creditor calls with a small down payment on your case. These are easily dischargeable.
2. Personal loans: Even debts to family members are discharged through a bankruptcy. This may actually cause problems for prospective applicants for bankruptcy protection. Any payments made to these "creditors" in the months proceeding a bankruptcy filing will have to be paid back by the creditors to the court to be fairly distributed among all the creditors.
3. Secured debts: Debts secured by an item like a house or car can be discharged if the item is returned to the creditor. Normally, if you walk away from a house or car, the creditors will sell the item at auction and come after the debtor for a "deficiency balance." This is not true when you file for protection under the bankruptcy code. These deficiency balances will go away.
If you qualify, you can sometimes "strip" second or third mortgages from your property through a Chapter 13 bankruptcy so that only the first mortgage remains. With the downturn in the economy and the deflated prices of homes, this type of relief has been utilized a lot.
4. Attorney's fees: Debts that you owe to attorneys are discharged in a bankruptcy.
5. Doctor's fees: These debts, too, are discharged through a bankruptcy.
Types of debts that are not discharged through bankruptcy:
1. Student loans: For some reason, the legislators have declared that student loans are not dischargeable. There are "hardship discharges" that can be applied for, but these are nearly impossible to qualify for.
2. Fraudulent debts: It is very hard for your creditors to prove that a debt is fraudulent, unless the debt was acquired a short time before filing. If you have made good faith payments on most of your debts, then chances are pretty good that a creditor will not even try to challenge the validity of the debt, since it is such an uphill battle.
Note: This is only for general information. You should contact an attorney with questions about specific debts. There are times when these general rules do not apply. There are exceptions to every rule. This is probably why an attorney's favorite response to every question is "depends."
This article has been provided by Patricia Ashcraft, a Murrieta, CA bankruptcy attorney that has been serving Riverside and San Bernardino Counties for over fifteen years.
Article Source: http://EzineArticles.com/?expert=Patricia_M_Ashcraft
Article Source: http://EzineArticles.com/7667806
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