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How To Get More Debt Discharged During A Bankruptcy

How To Get More Debt Discharged During A Bankruptcy

For most, the whole point of filing for a Chapter 7 bankruptcy is to eliminate their debts. While some debts cannot be discharged, most people will be able to rid most if not all their debts. Although credit card debts are among the most dischargeable debts, there’s also other different types of debts that a Chapter 7 can eliminate.

How Does a Discharge Work?

A discharge frees debtors from liabilities for the debts they owe and prevents creditors owed those debts from harassing and taking collectible actions against the debtor like repossessing their assets. In other words, debtors will longer be required to pay off any debts that have been discharged.
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While debtors are not personally liable for any discharged debts, valid liens that haven’t been avoided during the bankruptcy case will still remain effective. For this reason, secured creditor can impose the lien to recover any property that would have been secured by the lien. Most Chapter 7 bankruptcy filers normally receive their discharges after their cases are complete. In a Chapter 7 bankruptcy case, the court will normally grant the discharge after a 60-day period of the 341(a) Meeting of Creditors. This typically means that you’ll only be able to get your discharge some 4 months after you file the Chapter 7 petition.

What Debts Can Be Discharged?
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While not every debt can be discharged, most of your debts will be wiped out through Chapter 7, particularly if you don’t have any out-of-the ordinary circumstances. Among any dischargeable debts you have, only those incurred before you filed for the Chapter 7 petition will be eliminated. You’ll remain responsible for any debts you incurred after the filing of your petition and before being granted the discharge. If you want to get best advice on this topic contact dallas chapter 7 bankruptcy lawyer.

There are 19 debt categories listed by the Bankruptcy Code of debts that can’t be discharged. Anything that doesn’t fall within the categories can be discharged. The following is a list of common dischargeable debts. While this being the case, any fraud or misconduct in connection to the following categories will cause them to become dischargeable.

  1. Credit card charges, which include late fees and overdue payments
  2. Medical bills
  3. Collection agency accounts
  4. Medical bills
  5. Utility bills (only past due amounts)
  6. Personal loans from employers, friends and family
  7. Dishonored checks uncles if they are fraudulently based
  8. Repossession deficiency balances
  9. Student loans (but in a few rare cases)
  10. Business debts
  11. Auto accident claims (apart from those which involve reckless or drunk driving)
  12. Civil court judgements (except if they fraudulently based)
  13. Monies owed under any lease agreements, including due and past rent
  14. Attorney fees, unless if they are alimony awards and child support
  15. Tax penalties as well as past taxes over a certain period of time
  16. Social security overpayments
  17. Revolving charge accounts, unless they are extended payment charges
  18. Veteran assistance loans and overpayments.

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Understanding How Bankruptcy Is Going To Impact Your Credit Score

Understanding How Bankruptcy Is Going To Impact Your Credit Score

Most people who are looking to consider filing Chapter 7 or Chapter 13 bankruptcy often get worried about how bankruptcy is going to impact on their credit score. Although most creditors frown at seeing a credit report that has bankruptcy in it, the impact it will create on the credit score depends largely on how good the credit was before bankruptcy was filed.

Delinquency on several accounts, as well as a high debt-to-asset ratio (i.e. when lots of debts are accrued and few assets), will adversely affect the debtor’s credit. Although the score will drop modestly when bankruptcy is filed, however, there will be no drastic fall.

On the other hand, the score is bound to climb higher if the credit is good before filling bankruptcy. Thus, the detrimental effect of bankruptcy on credit scores is the main issue that discourages most people from filing it.

Obviously, there is no doubt that a bankruptcy can remain on a credit report for as long as ten years which can negatively affect the credit score. Nevertheless, if debts are reluctantly allowed to go to collections without filing for bankruptcy, the credit score will be seriously affected.

The credit score is sure to decline anywhere from 160 – 220 points when bankruptcy is filed, however, this depends mainly on the type of bankruptcy that is filed i.e. Chapter 7 or Chapter 13 bankruptcy. The decrease is good enough to lower a reasonable rating to a poor one. It will be very difficult to qualify for credit cards, a home or auto loan with bankruptcy since most lenders use credit score to determine if it is necessary or not to extend credit.

Although there are other measures that can be employed to positively enhance a credit report and credit score, time is the primary remedy of this kind of situation. Ultimately, a credit score is sure to increase bit by bit if the new debts are properly managed and then with time, a successful financial life would be regained, even if the bankruptcy has not yet been cleared.

How long can Chapter 7 Bankruptcy stay on credit?
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A completed Chapter 7 bankruptcy could take up to 10 years to stay on a credit report. However, the report could be dropped few years before the bankruptcy since all debts associated with Chapter 7 bankruptcy can be cleared within the space of some months after filing has been made.

How long can Chapter 13 Bankruptcy stay on credit?

On a credit report, debts that are associated with bankruptcy and the bankruptcy itself are usually displayed separately. Both discharged debts and a completed Chapter 14 bankruptcy will remain on a credit report for as long as seven years. Many debts can actively remain until the end of a 3 to 5-year payment plan in a Chapter 13 bankruptcy.

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How To Save Your Home With Chapter 13  Bankruptcy

How To Save Your Home With Chapter 13 Bankruptcy

Often people get behind in their mortgage payments. When you have a credit card to pay off as well as other payments and expenses which creep up, one can imagine how easily it is to get behind in these payments. This especially relates to someone who is set back because of an illness or a job situation.

How Bankruptcy Can Save Your Home

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Sooner than you know it, the creditors will be onto you, and your beautiful family home will be in the process of being repossessed. Fortunately, you can put a stop to this by quickly filing for Chapter 13 Bankruptcy. You will have to speak to a lawyer who specializes in this. Most people will be able to qualify for this by filling out a couple of forms and writing a test.

The lawyer will help you save your home by putting a stop to the repossession of your home. This is called automatic stay where the creditors are not allowed to go ahead with the foreclosure as well as the collection of any material possession. This can last a couple of months while you sort out how to come up with the best repayment plan.

What Chapter 13 Bankruptcy Does for You

You may have thousands and thousands of dollars to pay which you are behind in. With a Chapter 13 Bankruptcy plan, this can be split into installments lasting between 30 to 60 months, depending on your situation. A lawyer will help you come up with the best plan, bearing in mind that the trustee will do the payments for you and you will have to pay him commission.

Make sure you realize that it can differ slightly depending on where you reside. Some states will operate in a slightly different manner if you have a look at the clauses on their website. Your lawyer will also mention this to you, hopefully. Some attorneys offer free consultations in certain states, but unfortunately, this does not happen everywhere.

The three to five year plan that you have to pay off your mortgage with the Chapter 13 bankruptcy allows you more flexibility because you are obviously paying a lot less, and it allows you to catch up and pay off some of your other debts as well. By looking into this, you will also be able to save money on penalties and interest fees. Many people become more cautious when starting a plan like this.

You will always benefit from having a good bankruptcy lawyer with years of experience behind their name. It is important to shop around for someone like this who can get you back on track and set the record straight. They will also have good contacts, being in the industry for a long period of time.

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