Are you sick of constant phone calls from bill collectors? Debt collectors can call throughout the day and most of the night. It seems you never have peace once they start calling. The good news is there is a way out of it. To filing for Chapter 7 bankruptcy, you have to take a means test to make sure you qualify.
Credit Card Charges
Filing Chapter 7 bankruptcy will eliminate most of your credit card debt as long as it is unsecured. Some types of credit card debt that it may not get rid of is secured debt like jewelry or large appliances. Talk to your attorney to find out if those items can be repossessed.
Past Due Utility Bill Charges
For utility bills, it is only the past due amount that can be discharged. You are responsible for any accounts after your bankruptcy is finalized. Once you file for bankruptcy, the utility companies can not shut off your utilities. It is important to talk to an attorney to take the proper steps to ensure your utilities are safe from disconnection.
Business Debts
Business debts can be especially crippling when trying to get out of debt. Most of the time, these types of debts are higher than most household debts. Businesses have to pay higher costs for their services, such as cable, telephone, or internet. The utility bills are higher because of the amount of staff they have. So it makes sense that business debt could be a constant worry. Thankfully Chapter 7 bankruptcy will discharge you from this debt.
Medical Bills
It can be difficult when you have an illness or medical procedure that causes you to be out of work and then start receiving bills from the doctors and hospitals. Now, not only are you trying to recover and heal, but you have to figure out what to do with these unexpected bills. Chapter 7 gets rid of the medical bills for you, so you can heal and work on getting better instead of worrying about paying for your care.
Collection Agencies
Debt collectors can get aggressive when calling you. They typically harass you and send you letters that are meant to worry or scare you. Once you file bankruptcy, you will be clear of the debts that previous companies have sent.
Money Owed on a Repossessed Vehicle
If your car gets repossessed, they take it to a vehicle auction and then auction it off. Once it is sold, you are then responsible for the balance of the amount. When you declare bankruptcy, it will discharge this debt too.
What Debts Can not Be Discharged
Alimony and Child Support
Child support is considered priority debt, and these types of debts are not dischargeable through bankruptcy. It will also not stop any kind of court proceedings in a child support case.
Delinquent Taxes
Most types of delinquent taxes can not be discharged. The only exceptions that may be made are from many years ago. This would be something to discuss with your attorney.
Alternatives to Bankruptcy
Before deciding to look at bankruptcy options, you can take steps to see if you can cope with debt. Many people chose to do nothing about their debt many times because there is nothing they can do. They live at or below the poverty line and are unable to make payments.
Credit counseling is always a good alternative if you have the means to pay it back. You can also do this if you do declare bankruptcy. Credit counseling would help you learn how to manage money and create an emergency fund in hopes that you will not go through bankruptcy again.
A debt consolidation loan adds all of your debts together, and you make a single payment instead of multiple ones. Debt consolidation can help if you have trouble keeping your bills in order and the charges are too high. You can also make lifestyle changes. This is more difficult than it sounds. Changing your spending habits can be very difficult and something most people struggle to do.
Before choosing to file bankruptcy, make sure you know what debts can be discharged and those that can’t. There are times when it may make more sense to look into other avenues instead of deciding to declare bankruptcy right away. Talk to your local attorney to find out what is the best choice for you.
