Minnesota Bankruptcy Lawyers Fighting For You
If you are considering filing for bankruptcy, you probably have many questions. Often, our clients ask us what kinds of debts can and cannot be discharged. Other clients want to know what we mean when we say certain debts can be discharged.
First, we’ll clarify what discharging debts means in the context of Chapter 7 and Chapter 13 bankruptcy. Then, we’ll go over what types of debts can and cannot be discharged in Minnesota bankruptcy.
What is a Bankruptcy Discharge?
Most people considering bankruptcy are interested in Chapter 7 bankruptcy. The key purpose of filing for Chapter 7 bankruptcy is to have your most of your debt eliminated. The law has strict requirements that indicate who qualifies to file for Chapter 7 bankruptcy.
Under Chapter 13 bankruptcy, you pay what you can afford for 3-5 years, and whatever hasn’t been paid back at the end gets discharged. You work with your attorney to make a budget showing what you can afford. Eligible debt is discharged at the end of the repayment period.
When the court issues an order discharging certain debts you owed, you’re no longer responsible for paying those debts. Your affected creditors will receive a copy of the court’s order.
Creditors cannot collect debts that have been discharged in a bankruptcy case. They are not permitted to contact you regarding the debt. These debts will also show up on your credit reports as discharged in bankruptcy.
Debts that Can Be Discharged in Bankruptcy
A Chapter 7 bankruptcy takes away your personal liability for paying back most of your unsecured debts. With Chapter 13 bankruptcy, your eligible debt is discharged after you complete your repayment plan.
Most unsecured debt can be discharged in Minnesota bankruptcy. The money you owe utility companies, debt from medical bills, and credit card debt are common types of unsecured debt that can be discharged. It also works on payday loans, internet loans, credit union loans, and unpaid bills for services.
Debts that Cannot Be Discharged in Bankruptcy
For Chapter 7 and Chapter 13 bankruptcy cases, you remain legally responsible for paying debts that cannot be discharged. If you are filing for Chapter 13 bankruptcy, some debts that cannot be discharged may be included in your repayment schedule. Examples of this are recent income taxes and child support.
It’s important to make sure you include all of your debts when you file for bankruptcy. In most cases, the court does not discharge debts that were not listed when you filed. Don’t worry though, in Minnesota you can usually add them into the bankruptcy at any point in the future, so long as the debt arose before the case was filed. Walker & walker will work with you to find credit reports and court records to show all of the debts.
Student loans usually are not discharged. If you can prove to the court repaying your student loans would be a hardship, the court may make an exception and discharge them.
The period just prior to filing for bankruptcy is not a good time to go on a shopping spree. Bankruptcy cases do not discharge credit card debt you incur during 90 days before filing. Also, cash advances received in the 70 days prior to filing typically will not be discharged.
Your bankruptcy case cannot discharge an award a court has ordered you to pay for the malicious and willful injury of another person.
Debts you incur after filing for bankruptcy will not be discharged. Other debts that the court cannot discharge include:
- Child support
- Fines or penalties you owe for breaking the law
- Most debts from your divorce settlement or decree
- Certain tax debt
- Debt incurred by fraudulent means
Minnesota Bankruptcy Attorneys – Call Walker & Walker Today
Filing for bankruptcy is a complicated process that should not be undertaken without the professional guidance of a skilled attorney. At Walker & Walker Law Offices, PLLC, we have helped many people like you who are thinking about filing for Minnesota bankruptcy. It would be our privilege to help you on your journey to becoming debt-free.
For your convenience, we have four offices. They are located in Minneapolis, St. Paul, Blaine, and Brooklyn Park. Contact us to schedule a free bankruptcy consultation.