What Debts Are Not Dischargeable in a South Carolina Chapter 7 Bankruptcy?

How Does Chapter 7 Bankruptcy Work?

If you’re overwhelmed by debt and creditors threaten to take legal action against you, skilled bankruptcy lawyers in York County can help you explore your legal options. One approach would be to file for bankruptcy to enable you to get back on track without the pressure from those you owe.

Upon carefully evaluating your case specifics, your legal team can advise whether to file Chapter 7 or Chapter 13 bankruptcy. The two differ in requirements, eligibility, and types of debts that can be discharged under each chapter.

The concept of bankruptcy can be confusing but experienced lawyers near you can guide you to enhance the chances of a favorable case outcome.

Chapter 7 bankruptcy is also known as liquidation bankruptcy. It aims to help individuals eliminate most unsecured debts not tied to a specific property. Discharging these debts gives you financial relief to start again on a clean slate.

What Debts Can I Discharge in Chapter 7 Bankruptcy?

Chapter 7 bankruptcy attorneys in Rock Hill explain that a discharge is a legal tool offered to debtors overwhelmed by debt when they file for bankruptcy. It offers the following:

• Releases a debtor from the responsibility of paying a specific debt
• Prevents a creditor from pursuing the debtor concerning the released debt

However, it’s crucial to note that Chapter 7 bankruptcy only applies to certain liabilities and not others. Your lawyers will closely examine each debt you owe to determine how to classify them. Generally, Chapter 7 bankruptcy is for the following types of unsecured liabilities:

•  Personal loans
•  Outstanding medical bills
• Unpaid credit cards
• Accounts associated with collection agencies
•  Overpayments from government programs
• Utility bills
• Taxes and tax penalties that are older than three years
•  Certain civil court judgments from unpaid, unsecured debts
• Payday loans

Nonetheless, it’s crucial to understand that any dischargeable debt associated with misconduct or fraud can turn into a non-dischargeable debt. Talk to experienced Rock Hill Chapter 7 bankruptcy lawyers for an in-depth assessment of your debts and circumstances. They can evaluate if your debts are dischargeable before starting the process.

Which Debts Are Exempted in Chapter 7 Bankruptcy?

Some debts are not dischargeable under Chapter 7 bankruptcy, even if your bankruptcy case is successful. These include the following:

• Taxes from the last three years
• Alimony
• Child support
• Court fines and penalties
• Any money you owe the government
•  Debts from personal injury lawsuits involving drunk driving
• Debts related to a divorce proceeding

Rock Hill Chapter 7 bankruptcy attorneys add that some liabilities not canceled under Chapter 7 Bankruptcy can be discharged by filing Chapter 13 Bankruptcy if you’re eligible. These include the following:

• Debts from a dismissed bankruptcy case
•  Liens that have been crammed down or stripped
• Government fines, penalties, or forfeitures
• Malicious and willful damage to property
•  Any debt sustained to pay for non-dischargeable taxes

Can Creditors Object to Chapter 7 Discharge?

Under rare circumstances, creditors can object to having their debt discharged in Chapter 7 bankruptcy. For example, if a creditor believes you provided false information, committed fraud, or misrepresented some information, they can object to the discharge.

Lying on your credit card application or making large purchases right before filing for bankruptcy can make the creditor claim that you’re abusing the bankruptcy process. If they file an objection, the court will review your case and require that the creditor prove their case. Losing the case may mean you’ll still be responsible for that debt even if others are discharged.

Chapter 7 bankruptcy lawyers in Rock Hill advise that it’s best to stop using your credit cards when you realize you want to file for bankruptcy. Consider enrolling for credit counseling sessions if you find it challenging to stick to a budget without relying on credit.

Are There Debts That Can Either Be Discharged or Not Discharged?

When filing for bankruptcy, take note of a category of debts that can go either way. For example, student loans or back taxes owed to the IRS generally don’t qualify for a discharge, but they can sometimes be discharged. Skilled bankruptcy lawyers in York County can help determine if you qualify for a discharge on these debts.

There are conditions you must meet for both types of debts. For example, to discharge a student loan, you must prove that repaying the debt puts you under undue hardship, after which you must file a separate adversary proceeding to determine if you meet the undue hardship standard. If you qualify, the court may agree to discharge the debts, absolving you of the responsibility to repay them.

Is Chapter 7 Bankruptcy Right for Me?

Deciding if Chapter 7 bankruptcy is suitable for you calls for keen consideration of your financial situation, long-term goals, and needs. If you have a substantial amount of unsecured debt, Chapter 7 bankruptcy may be a viable option if you have limited assets. On the other hand, it may not be the best fit if your debts are primarily secured or have a high income.

An Experienced Bankruptcy Lawyer Helping You Navigate Chapter 7 Bankruptcy

The bankruptcy process can be complicated if you don’t understand the nuances. The good thing is that you don’t have to handle it alone. Working with experienced Chapter 7 bankruptcy lawyers in York County can make a significant difference in the outcome as they will help you make an informed decision.

The Howze Law Firm, LLC is a reputable bankruptcy firm in York County. Our legal team can work on your case and advise you on the available legal options based on your circumstances. Let us support you during this challenging time and help you rebuild your finances. Call us at 803-266-1812 to schedule a consultation.