Are All Debts Discharged if You Declare Bankruptcy in 2021?

Business owners and private citizens with overwhelming debt can get a fresh financial start by filing for bankruptcy. Chapter 7 bankruptcy will eradicate the majority of your debts, although there are some exceptions. One of the experienced lawyers at Davis, Ermis, & Roberts can help you file for Chapter 7 to liquidate your debt or Chapter 13 to reorganize it. Both of these options will help you get to a place where you can better manage your finances. Filing for bankruptcy can be helpful for debtors because once the amount is discharged creditors and collection agencies can no longer take action to pursue debt collection. However, when you declare bankruptcy some debts aren\’t able to be discharged, or it’s very difficult to escape them. A bankruptcy lawyer can help you navigate the bankruptcy process and advise you.

How to liquidate assets using Chapter 7

When you file for Chapter 7, a court-appointed trustee will sell off your assets to pay some of your debt to creditors. Things like your primary residence, vehicle, clothing, tools necessary to make an income, pension, and benefits are typically off-limits. The trustee will sell off any property that isn’t a necessity. This includes items like secondary and recreational vehicles, property aside from your primary home, valuables, and investment accounts. Then, your debts will likely be discharged in about 4 months. 

How to reorganize debt using Chapter 13

Filing for this kind of bankruptcy allows you to retain your nonexempt assets. You will be responsible for paying off a set amount of the debt in 3-5 years, and at the end of that period, your remaining debt will be discharged. This is generally the better option for people with more financial resources. 

Debts exempt When You Declare bankruptcy

According to the U.S. Bankruptcy Code, there are 19 categories of debt that can’t be legally discharged under Chapter 7, Chapter 12, or Chapter 13. Some of the more common categories include:

  • Spousal alimony
  • Debts not listed in the bankruptcy filing
  • Child support
  • Debts incurred for the death or injury to another person while operating a vehicle while intoxicated
  • Unpaid taxes within the statute of limitations

Debts that are difficult to discharge

There are some debts that are possible to discharge when you declare bankruptcy. However, you can expect to jump through hoops and do a lot of paperwork to get to that point. Some of these debts are:

  • Student loans
  • Tax debts

Davis, Ermis & Roberts Attorneys Can Help You Declare Bankruptcy

The lawyers at Davis, Ermis, & Roberts specialize in Chapter 7, Chapter 11, and Chapter 13 of Bankruptcy law. If you’re facing bankruptcy contact us away. We can consult with you and offer more information about the credit repercussions, the benefits, and help you through the process. Ron Roberts and his team have been representing clients across North Texas for more than 35 years. Davis, Ermis, and Roberts is an accessible, full-service law office that can help indebted clients get creditors off their back. Our goal is to help you get in control of your finances and help get your life back on track without feeling harassed. When you work with us we will always focus on solutions– not mistakes.