What debts are dischargeable through filing a Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy is not as generous as a Chapter 13 when it comes to the range of debts that can be discharged. However, there are still a wide range of unsecured debts that can be discharged. One of the most common
debts is that of credit cards, and they are typically the major component of any Chapter 7 bankruptcy petition.

Bankruptcy itself can only ever discharge unsecured debts, so secured loans such as mortgages and car loans will remain no matter which Chapter a debtor decides to file under.

Some of the more common debts that can be discharged include:

· Personal loans including loans from friends, family, and employers

· Credit cards including overdue fees

· Medical bills

· Debt judgments

· Repossession deficiencies

· Auto accident claims except those involving drunk driving

· Business debts

· Monies owed under lease arrangements

· Negligence claims

· Income taxes that aren’t priority taxes

· Tax penalties over 3 years old

When it comes to back taxes and penalties, there are provisions that relate to when you actually filed returns and whether or not fraud or tax avoidance is an issue. While these unsecured debts are discharged through a
Chapter 7 bankruptcy petition, the following debts cannot be:

· Debts not included in the schedules filed

· Recent taxes

· Child or family support

· Criminal fines and/or restitution

· Accident claims involving drunk driving

· Penalties payable to the government other than tax penalties

· Student loans

· Taxes for years where returns were not filed or filed for less than 2 years

A Chapter 13 petition for bankruptcy may discharge some of these debts. Where a Chapter 13 petition does benefit a debtor, is in its capacity to help debtors catch up on overdue debts that cannot be discharged. This may
assist in preventing further action such as jail time for unpaid fines. If you’re in doubt as to which Chapter to file for bankruptcy under, consult an experienced bankruptcy attorney.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a
friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations
packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we
develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Can I clear an IRS debt through bankruptcy?

Generally speaking, taxes are exempt from discharge through bankruptcy. However, in some cases you can discharge an IRS debt using a Chapter 7 bankruptcy filing. The only IRS debts that can be discharged are those that
are over three years old. There are certain conditions that must be met first.

The first condition is one that is attached to most debts. This relates to fraud and, in the case of taxation, tax evasion. Debts that arise out of fraud or tax evasion cannot be discharged through bankruptcy.

Other conditions include when you filed the tax return for the debt. Your return must have been filed at least two years prior to seeking relief through a Chapter 7 filing. There is also a “240-day rule” that has to be taken into consideration.

The “240-day rule” states that the tax debt in question must have been assessed by the IRS at least 240 days before you filed your bankruptcy petition, or it must not have been assessed as yet. Once your petition for
bankruptcy under Chapter 7 has been processed, your debt to the IRS will be discharged.

This effectively wipes out your personal obligation to pay the debt, and prevents the IRS from going after your bank account or garnishing your wages. There is one exception to this – if the IRS has recorded a tax lien
on your property before you filed your petition for bankruptcy, that lien will remain on the property.

Taxation can be a particularly tricky area when it comes to bankruptcy. It is important to seek legal opinion from a qualified and respected bankruptcy lawyer before proceeding with any application. Their advice could save you a lot of heartache and perhaps hundreds, if not thousands, of dollars.