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Chapter 7 Bankruptcy - Which Debts Are Dischargeable?

Chapter 7 Bankruptcy - Which Debts Are Dischargeable?
"In the current economic climate, numerous Americans are registering for chapter 7 bankruptcy. The purpose of declaring bankruptcy is to rehabilitate your credit, but you must discuss the pros and cons of this decision with your attorney before proceeding. If you are unable to deal with the disadvantages, you look for an alternative method to rebuild your finances. The greatest advantage of taking this initiative is that you can eradicate the majority or all of your debts.

Listed below are debts that can be eliminated:

Guaranteed debt

This type of debt is tied to your valued possessions, such as mortgage and car payments. When a house is sold to pay off debts, the creditors must be paid first. Here is a list of three secured obligations that may be discharged:

Mortgage

If you wish to eliminate this debt, it is possible that you will have to confront foreclosure. When you stop paying your mortgage, you are essentially returning your residence to the mortgage company or the bank.

Past due rent

You can avoid eviction for a brief period of time if you declare bankruptcy. If you are struggling to pay your rent, the court may order the landlord to allow you to remain in your rental property. Even if you are not required to make previous rent payments, you may still be evicted.

Auto loan obligations

Auto loans are secured obligations that can be repossessed if payments cannot be made. If you file for chapter 7 bankruptcy, you may be able to exempt your vehicle if it is an older model and worth less than $10,000. A newer, more expensive model will be returned to the car manufacturer.

No secured debt

The distinction between unsecured and secured debt is that this debt has nothing to do with your possessions. The most commonly discussed form of unsecured debt is credit card debt. When taking this action, you must record your balance as a debt. Thankfully, this debt can be eliminated without significant complications.

The only disadvantage is that your credit card will be cancelled if you dispute the charge. If you agree to make a full payment after filing for bankruptcy, credit card companies will let you retain your credit card. You are not required to notify the company that you are filing for bankruptcy if you owe no money on the card, but be aware that the company may find out and cancel your card.

" - https://www.affordablecebu.com/
 

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"Chapter 7 Bankruptcy - Which Debts Are Dischargeable?" was written by Mary under the Finance / Wealth category. It has been read 127 times and generated 0 comments. The article was created on and updated on 03 June 2023.
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