Say Goodbye To These Debts With Chapter 7

Not all debts are forgiven with a chapter 7 filing. It's important that you understand what can be forgiven before you file. In most cases, the debt load that is shed when you file chapter 7 is considerable and enough to make it worth your while. Read on and find out what you can expect when it comes to shedding debt with a chapter 7 bankruptcy filing. 

Personal Loans

Also sometimes known as a signature loan, these loans are not based on collateral. This type of loan is almost always forgiven in chapter 7. The exception could be loans acquired just before the paperwork is filed. The bankruptcy trustee and the loan holder might object on the basis that you took out the loan knowing that you were about to file. 

Credit Card Debt

Most consumers have far too much of this type of non-secured debt. Luckily, almost all credit card debt can be discharged by filing for chapter 7. The exception is when credit cards are used for frivolous purchases prior to the filing. However, if you must charge food or a vehicle repair on a credit card, that is probably okay with the trustee. Ask your bankruptcy lawyer about recent credit card charges to find out more. 

Medical Debt

Collection activities for medical debts can be extremely aggressive. It's often a huge relief to file for chapter 7 relief, primarily because of the automatic stay. This virtual legal stop sign signals debt collectors that they must stop immediately. They cannot contact you for any reason once the chapter 7 paperwork is filed. In almost every case, 100% of all medical debt can be dismissed with chapter 7. 

Mortgages and Auto Financing

This is a bit trickier to cope with. Most of the time, homes and vehicles are connected to mortgages and auto loans. That means the creditor has the right to take back the property if the loans are not paid as agreed. With the above financial obligations, consumers can simply cease paying the bills and let the bankruptcy take care of things. However, doing that can result in the loss of property because creditors may take action to take the property at a certain point after the automatic stay expires. You may need to continue paying this obligation if you want to keep the property associated with it. Speak to your bankruptcy lawyer and find out how to handle secured loan debts like mortgages and vehicle loans. 

Speak to a bankruptcy lawyer to find out more.