Loans, medical debt and credit card debt are generally all able to be discharged through bankruptcy. Tax debt, alimony, spousal or child support and student loans are all typically ineligible for discharge.
Bankruptcy is a great way to get rid of credit card debt, medical bills, and personal and payday loans. But bankruptcy can't wipe out recent income tax you owe, alimony, child support, or debt incurred from illegal acts (embezzlement, larceny, etc.)
Types of debt that cannot be discharged in bankruptcy include alimony, child support, and certain unpaid taxes. Other types of debt that cannot be alleviated in bankruptcy include debts for willful and malicious injury to another person or property.
Perhaps the most common debts that cannot be discharged under any circumstances are child support, back taxes, and alimony.
The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units ...
Generally speaking, negative information such as late or missed payments, accounts that have been sent to collection agencies, accounts not being paid as agreed, or bankruptcies stays on credit reports for approximately seven years.
The discharge order won't list the debts you wiped out in Chapter 7. Instead, it will list the debts that bankruptcy law says all filers remain responsible for paying. You'll stay on the hook for the following: Mortgages, car loans, and other "secured" debts if you keep the property.
Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and forgiveness through income-driven repayment (IDR) are three of the ways federal student loan borrowers can still avoid paying back the rest their loans.
Similarly, in Deuteronomy 15, God says that every seven years, creditors should “remit the claim that is held against a neighbor” because “the Lord's remission has been proclaimed.” In the New Testament, Jesus instructs his followers to pray “forgive us our debts, as we also have forgiven our debtors” (Matthew 6:12, ...
Debt forgiveness is usually available for unsecured debts like credit cards, personal loans, or student loans. Secured debts like a mortgage or a car loan are not usually eligible for debt forgiveness. If you default on a secured debt, the lender will likely pursue foreclosure or repossession.
Upon your death, unsecured debts such as credit card debt, personal loans and medical debt are typically discharged or covered by the estate. They don't pass to surviving family members. Federal student loans and most Parent PLUS loans are also discharged upon the borrower's death.
The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.
Psalm 37:21 says, “The wicked borrows but does not pay back, but the righteous is generous and gives.” So debt in itself is not sinful, but the motivations of taking on debt can be sinful. The Bible encourages us to be debt-free and to owe nothing to anyone except to love one another.
Matthew 6:12 - Forgive us our debts, as we forgive our debtors. Matthew 18:27, 30, 32, 34 - Forgive because your debts have been forgiven.
It's wrong not to repay debts
Psalm 37:21 says, “The wicked borrows but does not pay back.” This doesn't necessarily mean that it's always wrong for a Christian to declare bankruptcy.
Warning: There could be tax consequences for debt forgiveness. If a portion of your debt is forgiven by the creditor, it could be counted as taxable income on your federal income taxes. You may want to consult a tax advisor or tax attorney to learn how forgiven debt affects your federal income tax.
Most credit card issuers won't forgive all your outstanding debt, but they will work with you on repaying with a different payment plan. They may also negotiate with you on the total amount you owe if you are severely delinquent.
Student loan forgiveness plans are only for borrowers who took out federal loans. Private student loans do not qualify for any of the existing forgiveness plans. Under different plans, different people qualify for student loan forgiveness.
“Chapter 7 applications get denied more often than people think,” Derek Jacques, of The Mitten Law Firm, in Michigan, said. “In my experience, about 15% don't even get approved. From there, they can be dismissed before the process is completed for a lot of reasons.”
Capably managing your credit after bankruptcy could put you back above 700 — the good-risk range — in as few as four years. Again, this means minimizing your credit card balance utilization, paying off balances, and being punctual repaying your debts.
However, filing for bankruptcy is not free, and the process has associated costs. When an individual files for bankruptcy, they are typically responsible for paying the costs of the bankruptcy process, while the business is responsible for paying the costs of the bankruptcy process when a business files.
A 609 dispute letter is actually not a dispute but is simply a way of requesting that the credit bureaus provide you with certain documentation that substantiates the authenticity of the bureaus' reporting.