One of the major appeals of Chapter 7 bankruptcy is the wide scope of debt discharge, usually providing a sufficient level of debt relief to allow a debtor to effectively start over again. However, the law establishes special guidelines for circumstances that may require a debtor to continue paying his or her creditors when the debt would normally be discharged. In these situations, there can be a great deal of legal confusion over how debt discharges can be denied.
If you are considering filing for bankruptcy, contact a Birmingham Chapter 7 bankruptcy lawyer from GREENWAY BANKRUPTCY LAW, LLC at (205) 324-4000 to learn more about your options.
Types of Dischargeable Debts
Under normal circumstances, debt incurred by a debtor that is generally considered dischargeable will be discharged. However, the court may refuse to discharge a particular debt if the debtor has proven to be negligent regarding his or her treatment of creditors.
Debts that are commonly discharged include:
- Credit card balances
- Business loans
- Post-repossession payments
- Personal debt
- Car accident and negligence claims not willfully caused
Generally speaking, a conscientious debtor who simply made a few costly financial mistakes will have few issues discharging major debts. In addition to discharges, debt may be retained, or reaffirmed, if a debtor agrees to pay a creditor in return for a promise to not repossess certain possessions.
The details of bankruptcy law can be quite complex, especially when it comes to the discharge of debts. If a creditor believes that their debt is non-dischargeable, they may fight for their payments, despite the debtor’s inability to pay. Help protect your financial interests and learn more about your legal rights by contacting a Birmingham Chapter 7 bankruptcy attorney from GREENWAY BANKRUPTCY LAW, LLC at (205) 324-4000.