One of the ultimate goals of a bankruptcy filing is to obtain a discharge of one’s debts. A discharge of a debt
means that the debt is no longer owed. The creditor cannot pursue any action to attempt to collect on that discharged debt. Most, but not all debts are dischargeable.
Generally, debts that are unsecured are dischargeable. Unsecured debts include credit cards, medical bills, unpaid cell-phone charges and the like. One major exception to a discharge of an unsecured debt is a student loan which, absent the showing of an undue hardship, is not dischargeable.
Secured debts are another exception to dischargeability. Examples of secured debts are a mortgage and a car loan. If you are keeping your house or car, you must continue to pay the loan on that property. Conversely, if you are surrendering the property, then the debt will eventually be considered an unsecured debt and will be discharged along with the other unsecured debts.
In some situations, a second mortgage may be considered unsecured due to the value of the property and the balance owed on the first mortgage. If filing a Chapter 13 Bankruptcy, the second mortgage can be discharged after completion of the bankruptcy. ( Click here to learn more about stripping a second mortgage).
Another class of debts that is often not dischargeable is tax liabilities. Whether or not a tax debt will be dischargeable depends on several factors, including the type of tax owed, the year in which it occurred, and whether or not a tax return was filed and, of so, the date it was filed.
If you are faced with the need to file for bankruptcy, you want to get all of the benefits possible out of that bankruptcy. This means ensuring that all debts which can be discharged are in fact discharged at the end of the bankruptcy case. It also means that you should consult with an attorney who is experienced in handling bankruptcy cases.
The attorneys at Yellin & Hyman have the experience and dedication needed to properly handle your case. With offices conveniently located in Franklin and Hyde Park, Yellin & Hyman is readily available to assist you with your most urgent and pressing legal needs.
Contact a Bankruptcy Attorney for a free consultation
For more information or to schedule a free initial consultation with an experienced lawyer, please contact Yellin & Hyman today.
Make sure that your debts are properly discharged if you are filing for bankruptcy. Call our Franklin office at 508-528-8885 or our Hyde Park office at 617-361-5310. You can also e-mail us to learn more about our legal services.