Hawaii Bankruptcy Firm Offers Guidance Regarding Dischargeable Debt
Honolulu Bankruptcy Attorneys Can Answer Your Debt-Related Questions
While most debts can be eliminated, or discharged, in bankruptcy, certain obligations are non-dischargeable and will survive your bankruptcy. It's important that you understand the difference.
Dischargeable debts can be erased by your bankruptcy discharge, meaning that you will no longer be obligated to pay those debts and creditors can no longer try to collect them from you. Some common types of dischargeable debt include:
- Credit card debt
- Medical bills
- Personal loans
- Utility bills
In chapter 7 bankruptcy, you can totally eliminate dischargeable debts without any repayment, since chapter 7 bankruptcies are usually no-asset cases and there is no property for the trustee to sell to pay your creditors with.
In chapter 13 bankruptcy, most dischargeable debts are treated as non-priority general unsecured claims, and depending upon your income, assets, and expenses, those creditors typically receive little or nothing through your repayment plan. Upon the completion of your payments, the debt is discharged.
Congress has determined that certain debt is non-dischargeable, meaning that it is too significant to be erased in bankruptcy. Non-dischargeable debts survive bankruptcy, are not eliminated by a bankruptcy discharge, and will likely need to be repaid after the bankruptcy.
Most non-dischargeable debts are excepted from discharge without action from the creditor, although some obligations (such as those acquired by fraud) require a creditor to object to the discharge, prove fraud, and obtain a court order before they will be considered non-dischargeable. Some examples of non-dischargeable debts include:
- Child support
- Criminal fines, penalties, and restitution
- Some tax obligations
- Student loans
- Debts acquired through fraud
If you have questions regarding dischargeable and non-dischargeable debt, an experienced attorney at The Law Office of Jean Christensen LLLC can offer clarification based upon your unique financial situation. Contact our bankruptcy attorneys online or call 808-521-1202 to schedule your free initial consultation today.