A common misconception is that a bankruptcy wipes out all of your debt. However, although a bankruptcy can forgive many of your debts, it does not forgive all of them. In a Chapter 7 bankruptcy, the non-exempt property and assets of the debtor are liquidated to pay off creditors. Property and assets that the court categorizes as exempt are not liquidated and can include:

• Homestead (your home)
• Personal property (clothing, furniture, appliances, etc.)
• Wages
• Trade tools
• Some pensions
• Some public benefits
• Compensation from lawsuits
• Some Insurance policies
• Business partnership property

Dischargeable versus non – dischargeable debts

In a Chapter 7 bankruptcy, debts that are typically discharged include:

• Personal loans and credit card debt
• Business debts
• Income taxes older than three years
• Judgments
• Leases
• Medical bills
• Negligence claims

Non – dischargeable debts under Chapter 7 include:

• Child and spousal support
• Current taxes
• Student loans
• Non-discharged debts from a prior bankruptcy
• Criminal fines or restitution
• Non-tax penalties owed to the government
• Trust fund taxes

A Chapter 13 bankruptcy requires you to repay some or all of your debt over a three or five year period. When the payment plan is complete the debts detailed in your repayment plan are discharged. Debts that cannot be discharged under Chapter 13 include:

• Spousal and child support
• Student loans
• Debts not listed on your bankruptcy schedules
• Debts related to DUI convictions
• Criminal fines and restitution

Talk to an experienced Texas bankruptcy attorney

Bankruptcy is a serious step and consulting with an experienced Texas bankruptcy attorney before filing should be high on your list. Contact us online or call 972-772-3083 to schedule a free consultation today.

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Call Rockwall bankruptcy lawyer Carrie Weir at 972-772-3083 or fill out the contact from below for a free, confidential consultation to discuss your options.

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