Debt can quickly become unmanageable when the debts and interest rates build up. Keeping up with multiple sources of debt at once might be impossible when financial emergencies strike. Finding out which debts can be discharged and which debts cannot be discharged might help you decide whether to file for bankruptcy. Reach out to a Chattanooga bankruptcy lawyer to find out more about your options.
How Debt Discharge Works
Bankruptcy is the process of debt discharge that permanently prohibits creditors from collecting money for the owed debt. This means that those who successfully file for bankruptcy are protected from legal actions being taken against them by creditors. In other words, debt discharge cancels your debt, so you do not have to pay back the debt anymore.
However, debt discharge comes with certain challenges. Only certain types of debt can be discharged. Even for debts that can be discharged, certain types of bankruptcy may not always guarantee full debt discharge. Creditors can file a complaint and start a lawsuit against you to prevent debt discharge.
Debt discharge can also take time. The length of discharge ranges from 60 days to five years, depending on the type of bankruptcy and debt. Some forms of debt discharge come with mandated classes on financial management. Others come with payment plans that last years before the debt is discharged.
In some situations, the court can revoke a debt discharge. Common reasons for this include bankruptcy fraud, having property of a bankruptcy estate, failing to provide documents or acts of impropriety. Consider contacting a bankruptcy lawyer to find out ways to overcome these obstacles.
There is also the challenge of facing the consequences of bankruptcy, like a damaged credit score. This can create barriers to better interest rates and financial deals.
Which Debts Cannot be Discharged?
The debts that cannot be discharged range from taxes to divorce-related debt. Debt discharge will only work for debts before the date you filed for bankruptcy. Divorce-related debts that continue past this date, like alimony and child support, cannot be discharged as a result.
Taxes are still owed to the government regardless of filing for bankruptcy. Student loans have yet to be allowed in debt discharge. Legal-related debt like court fines and criminal restitution cannot be discharged with bankruptcy. The same goes for most money owed after being sued, like in the case of a personal injury claim.
It is still vital to list out any and all debt you owe when filing for bankruptcy. Leaving out property and debts could lead to problems when filing for bankruptcy. Judges can deny debt discharge if certain information is left out. This is especially true if the judge discovers that you hid debts, destroyed records, or tampered with evidence.
Contact Tom Bible Law Today
You may not have to keep dealing with overwhelming debt. Feel free to call us at Tom Bible Law today at (423) 424-3116 for a consultation about bankruptcy options. Our legal team of Tennessee bankruptcy attorneys might be able to help you escape your debt through bankruptcy. We serve clients in the Tennessee cities of Chattanooga and Tullahoma.