Discharge Debts Through Chapter 7
At Edwin M. Shorty Jr. & Associates, in New Orleans, Louisiana, our attorneys have been helping individuals and families start over from their debts since 2003. One of the most common questions we get is about the types of debt that can be eliminated through Chapter 7 or consolidated into a single monthly payment plan through Chapter 13 bankruptcy.
Debts That Can Generally Be Eliminated
- Credit card debt: Except under certain circumstances, all or most “revolving” credit card debt may be eliminated through Chapter 7. All credit card debt may be included in the debt consolidation plan through Chapter 13.
- Bank loans: In most cases, bank loans are usually backed up by some form of collateral, such as the car you purchased. Bank loans may be eliminated through Chapter 7, but keep in mind that the bank has the right to repossess the collateral property. That is the same for a mortgage on your home. There are ways to avoid repossession and foreclosure by taking some simple steps we can help you with.
- Medical bills: After meeting certain criteria, most medical bills can be discharged through Chapter 7. All medical bills can be included in the debt consolidation plan through Chapter 13.
- Tax arrears: The IRS has special rules regarding the age of the back-taxes you owe and your record of trying to repay them. In some cases, state and federal taxes may be included in bankruptcy.
- Gambling debts: Under certain conditions, debts related to gambling may be discharged or consolidated.
What Can Not Be Discharged In Chapter 7, But Can Be Included In Chapter 13
- Student loans: Federally backed student loans may not be included in Chapter 7 but may be part of your debt consolidation repayment plan in Chapter 13. At the end of a repayment period lasting three to five years, your student loans will be paid off.
- Child support and alimony: No court-ordered financial support debt may be discharged in Chapter 7, however, it may be included in Chapter 13 consolidation plan.
- Small Business Administration (SBA) loans: Federal loans through the SBA may not be discharged through Chapter 7 but may be included in Chapter 13.
- Second mortgages: The amount of your second mortgage loan may be “stripped off” through Chapter 13 if your house payment if your home value is below the value of your original mortgage amount.
Call Us To Learn More About What Type Of Debt Can Be Discharged
Contact our offices to discuss your debt circumstances with a lawyer at our law firm today. Call 504-207-1370 or send an email to arrange a free consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.