After you receive your notice of discharge from the Bankruptcy Court, there are certain types of debt that will be discharged; In other words, there are certain types of debt that you will no longer be responsible for paying back to creditors. While there are some types of debts that cannot be discharged, filing a Chapter 7 Bankruptcy will wipe out a majority of your unsecured debt.
The vast majority of people filing for bankruptcy are trying to get rid of credit card debts, and thankfully, Chapter 7 will succeed in clearing most credit card debts. The only exceptions to this statement are if the case involves fraud or if the debtor purchased luxury items immediately before filing. However, if neither of those two situations apply, credit card debt will be discharged.
The next most common reason people decide to file for Chapter 7 Bankruptcy is a direct result of medical bills. With the rising cost of medical treatment and the large amount of people with inadequate or even no medical insurance, many people today find themselves overwhelmed by medical bills. Fortunately, medical bills will be discharged through filing for Chapter 7 Bankruptcy. In fact, billions of dollars in medical bills are discharged every year through bankruptcy.
In addition to credit card debt and medical bills, lawsuit judgments are also an extremely common reason individuals file for bankruptcy. Most civil lawsuits that are filed are about money owed, and if someone wins one of these lawsuits against you, the court will issue a judgment that states you need to pay. If you do not pay once this judgment has been granted, the judgment holder is entitled to collect it. They can do this numerous ways, including seizing your bank account, garnishing or levying your wages, or by placing a lien on your home. Most judgments are discharged in Chapter 7 Bankruptcy; however, there are some exceptions to this. Generally speaking, though, if you have a garnishment on your paycheck filing for bankruptcy may be an option for you.
Increasingly today, things are leased rather than owned. When you break a lease agreement, subsequently, there are often severe penalties for doing so. Additionally, so debtors have obligations under a signed contract doing something like selling real estate, buying a business or performing artistically. When these contracts are broken, some debtors are sued for breach of contract damages. While there are some rare exceptions to this, monetary damages to the debtor for breaching these types of contracts can also be discharged through bankruptcy.
Chapter 7 Bankruptcy is a feasible option for many people who are struggling under mass amounts of unsecured debt. It gives debtors a chance to start fresh with a clean financial slate, and get back on their feet again. Should you have additional questions about if a Chapter 7 Bankruptcy is the right option for you, please contact a St. Louis Bankruptcy attorney today!