What Debts Can Bankruptcy Eliminate?
Life isn’t stable. Sudden injuries, divorce, accidents, and layoffs can change your financial stability in a matter of months. For this reason, the United States Constitution protects your right to be freed from unmanageable personal debts through bankruptcy proceedings.
With help from the right Columbia bankruptcy debt elimination attorney at Reed Law Firm, P.A., you can obtain the complete discharge of your consumer debts and even mortgage deficiencies. Call (803) 726-4888 or contact our experienced bankruptcy lawyers online to schedule a confidential consultation today.
Debts Dischargeable Through Chapter 7 Liquidation
Individuals without sufficient income – generally below the state median – or substantial debts may file for Chapter 7 bankruptcy. This form of personal or business bankruptcy requires the trustee to gather and sell all non-exempt assets. The trustee then pays your creditors in priority order, generally starting with secured creditors (such as the mortgage holder) and priority unsecured creditors (government entities).
Any remaining unsecured creditors take a pro rata share of the remaining available assets, after which the court may discharge the following debts:
- Credit cards
- Personal loans
- Mortgage deficiency
- Vehicle deficiency
- Past due rent
- Utility arrears
- Medical bills
- Payday loans
- Personal injury and non-criminal legal judgments
Discharge means you’re released from any future personal obligation to pay these debts, and creditors can no longer attempt to collect on these debts or contact you regarding payment.
Special Discharges Available to Chapter 13 Petitioners in Columbia
Chapter 13 bankruptcy, also called a wage earner’s plan, is available to debtors with stable income who cannot pay their debts and expenses. This plan restructures your debts into a manageable 3-to-5-year repayment plan, with the balance of any debts remaining upon plan completion forgiven to the same extent as under Chapter 7.
However, Chapter 13 petitioners have the option of keeping their homes throughout proceedings and continuing to make mortgage payments. They may also be able to obtain special discharge of certain divorce obligations, such as property distribution payments, and otherwise non-dischargeable malicious injury judgments.
Non-Dischargeable Debts and Hardship Discharges in South Carolina
Always speak with legal counsel before filing for bankruptcy in Columbia because many debts are not dischargeable. Non-dischargeable obligations include the following:
- Child support payments and arrears
- Alimony
- Recent tax debts
- Student loans (hardship discharge available)
- Debts incurred through criminal activity
- DUI-related judgments
- Government fines and restitution
- Co-op and HOA fees
- Unlisted debts
Although you can potentially fold these payments into an eligible payment plan or negotiate private settlements, they are not forgivable when the bankruptcy case ends. Experienced attorneys can argue for a hardship discharge for some debts, especially with student loans, which can help get certain non-dischargeable obligations forgiven.
Consult Our Bankruptcy Discharge Lawyers in Columbia, S.C.
Every family situation is unique. Because not all debts are dischargeable, and some petitioners want to keep their homes and vehicles, do not file for bankruptcy without speaking with a dedicated Columbia bankruptcy attorney from Reed Law Firm, P.A. We help you eliminate debts through bankruptcy, stop foreclosure proceedings, and give you a fresh start. Confidentially call (803) 726-4888 or connect with our South Carolina debt relief law firm online today.
