Dischargeable Debt in a Chicago Bankruptcy
Guidance in Discharging Debt
In today's economy, many people have found themselves in financial turmoil, namely due to a substantial amount of debt. Fortunately, a number of viable options are available to those who are struggling with debt, including bankruptcy. Through the process of filing, an individual is afforded the opportunity eliminate most, if not all, of their debt and move forward with a fresh start.
We can assist you if the debt is incurred in the following ways:
- Credit card expenses
- A costly divorce
- Unmanageable medical bills
- Other unforeseen circumstances
When filing under Chapter 7 of the U.S. Bankruptcy Code, one's assets would be liquidated and sold to repay creditors. From there, the court would discharge the rest of the individual's debt. When filing under Chapter 13, however, the process of discharging debt is handled much more gradually. Instead, the consumer would be given the opportunity to restructure their debt and devise a manageable payment plan that would be executed over three to five years. At the conclusion of their case, the court could then choose to discharge any remaining debt. Both options can serve as a practical way to get out from underneath debt.
What type of debt is dischargeable?
One of the biggest advantages of filing for bankruptcy in Illinois is that most of your debt can be discharged and you may no longer be responsible for paying it back. It is important to understand, however, that not all debts are dischargeable through this process. At the conclusion of the bankruptcy process, you may still have debt that you are legally required to repay.
This will not include the following:
- Credit card debt
- Rent that is past due
- Medical debt / hospital bills
- Collection agency accounts
- Business debt
- Bad checks
What type of debt is non-dischargeable?
Although filing for bankruptcy is a practical way to eliminate a substantial amount of debt, there are some forms of debt that are considered to be "non-dischargeable." This means that you can still be legally responsible for repaying them when the process has been concluded. Even so, it may be much easier to make these payments once all of your dischargeable debt has been eliminated.
Some of the debts that cannot be discharged in bankruptcy:
- Student loans
- Child support / alimony
- State and federal taxes
- Debt not included on the petition
- Housing or rental fees
- Personal injury damages
- Government fines
Contact a Chicago Bankruptcy Lawyer
If you still have questions about dischargeable and non-dischargeable debt in Illinois, our legal team encourages you to get in touch with our Chicago bankruptcy attorney. The more you know about your rights and your options, the more comfortable you can be when deciding upon a debt relief solution. There is no reason why you should wait any longer to take advantage of a free initial consultation with a Chicago bankruptcy lawyer at our firm. We would be happy to sit down with you and discuss your case, but it is up to you to take the first step.
As such, we ask that you give us a call today at (312) 957-8077 or submit a free bankruptcy evaluation form. From there, we can get started on figuring out a course of action that is right for you.