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What can and cannot be discharged in bankruptcy

Mortgage, auto loan and credit card debts are among those that Virginia residents and others may be entitled to discharge in bankruptcy. In a Chapter 7 bankruptcy case, assets are liquidated with the money used to repay creditors. It is important to note that not all assets are liquidated as individuals are allowed to keep whatever they need to get to work or otherwise earn a living.

Those who have filed for Chapter 7 bankruptcy in the past eight years may be required to file for Chapter 13 bankruptcy. This may also be true if an individual makes too much money to qualify for a liquidation bankruptcy. In a Chapter 13 case, debts are reorganized and paid over a period of time. Any balances remaining at the end of the repayment period can usually be discharged. There are some debts that cannot be discharged in a Chapter 7 or Chapter 13 proceeding.

Generally speaking, those who owe money to the government cannot have those balances discharged. It is also generally not possible to have student loan debts discharged unless not doing so would cause an undue hardship. Child support payments will typically remain even if an individual has other debts that are discharged. If a person files for bankruptcy, it can remain on a credit report for up to 10 years.

Filing for Chapter 13 bankruptcy may make it easier to make monthly debt payments. In addition to manageable payments, creditors generally cannot contact debtors or take collection actions while a case is open. Therefore, it may provide an opportunity for individuals to renegotiate the terms of a loan or otherwise obtain more time to sell an asset. An attorney may be able to further explain the benefits of filing for bankruptcy protection.

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Bowen Ten Cardani, PC

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Richmond, VA 23233

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