Articles Tagged with Discharge debt

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Bankruptcy Lawyer Bryan W. Stone answers the question: “What are the pros and cons of bankruptcy?”

Bankruptcy is an option for Americans to discharge their debts and set themselves up to have a better financial future. We live in a world in which a person’s credit history can dictate some important parts of their lives. Credit scores impact your ability to rent an apartment, buy a house, and even secure a credit card to have in the event of an emergency. Filing for bankruptcy will affect a person’s credit score; there is no way to avoid it. However, a misconception surrounding bankruptcy is that there is no way to rebuild credit after filing for bankruptcy or that the process takes too long. There are ways to rebuild your credit in an efficient and timely manner.

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Debt Letter blocks Charlotte Bankruptcy Lawyer North Carolina Debt Collection AttorneyIt’s often the case that North Carolinians facing financial trouble and thinking about bankruptcy don’t understand all of the important details about the process. One common misunderstanding is that once a bankruptcy has been filed all your debts are immediately discharged, meaning you can start anew with a blank financial slate. Sadly, that is not always the case as there are some categories of debt that cannot be discharged during the bankruptcy process. Though this may not affect everyone, it’s important to understand which debts are and which debts are not dischargeable before beginning the bankruptcy process.

 

What does it mean to “discharge” a debt?

 

So how do you know which categories of debt are dischargeable and which aren’t? Start by looking at the bankruptcy code. Section 523(a) of the Bankruptcy Code contains a list of which debts cannot be discharged during a bankruptcy. This means that if your debts fall into one of the listed categories even if you prevail in your bankruptcy filing you will still be responsible for paying back the money owed.

 

What is not dischargeable?

 

Some good examples of debts that are not dischargeable during bankruptcy include things like child support and alimony arrearages, back taxes, many if not most student loans, debts that were not disclosed by the debtor and certain personal injury judgments and, oddly, debts that are related to housing fees. Also, debts that were acquired by fraud and debts that are related to criminal penalties or restitution are not eligible for discharge.

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