Filing for Chapter 7 Bankruptcy Can Provide Much Needed Relief

Filing bankruptcy may seem overwhelming, but in many situations it is truly the best option for getting your debt under control. Chapter 7 bankruptcy, also called straight bankruptcy or liquidation bankruptcy, allows debtors to discharge most of their debts without being subject to a repayment plan. However, Chapter 7 filers may be required to surrender some personal property to help satisfy outstanding claims.

A successful Chapter 7 bankruptcy clears almost all debt a person has prior to filing through a process called “debt discharge.” A discharge is exactly what it sounds like – the debt is erased and creditors cannot collect.

The bankruptcy court will grant a discharge in the vast majority of Chapter 7 cases.

However, debtors should be aware that there are certain types of debt that are very hard, if not impossible, to discharge. These include:

  • Some outstanding tax obligations
  • Alimony or child support
  • Criminal restitution orders
  • Student loans
  • Civil judgments stemming from drunk driving accidents
  • Debts from willful or malicious injury to persons or property

Most common forms of debt, like credit cards and medical bills will be completely discharged. Secured debt, such as auto loans and home mortgages, can also be discharged, but the underlying property will likely have to be given up as collateral. Bankruptcy filers can choose to keep their homes or their cars by “reaffirming” the debt and keeping it out of the bankruptcy discharge.

For anyone facing creditor harassment and insurmountable debt, Chapter 7 bankruptcy can provide a path to regaining financial stability and a start to a brighter future.

Source: FindLaw, “Chapter 7: Debt Discharge.”

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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