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What are the debts that remain after a Chapter 7 filing?

The economic recession that swept through the country a few years ago left many people in Tennessee, as well as in the rest of the country, under the burden of overwhelming debt. While some of those people have been able to recuperate, there are still a large number of debtors who are in the middle of a financial struggle. Chattanooga residents may be aware that for many of those people, especially people whose debts are high and unmanageable and who do not have a steady source of income, filing for Chapter 7 bankruptcy may be a good option.

A Chapter 7 filing involves the liquidation of all assets of an individual debtor, except certain exemptions that are allowed according to state and federal laws, in order to repay creditors. Once the debtor completes the Chapter 7 process and is granted a discharge from the bankruptcy court, that debtor is released from personal liability of most of the debts. Not only will the debtor obtain a discharge, but the person will also be able to successfully end all credit collection efforts. However, a Chapter 7 filing does not discharge a debtor of all debts.

According to current bankruptcy laws, a Chapter 7 filing cannot discharge a debtor from debts that were not included in the filing. A Chapter 7 filing is also not able to discharge a debtor from the liability of federal and state taxes, student loans, child support and spousal support obligations, fees and fines that were imposed by a government entity, legal expenses, debts that are a result of personal injury and wrongful death damages and those debts that may have been discharged in an earlier bankruptcy filing. There may also be certain other debts that cannot be discharged, depending on the debtor's personal circumstances.

While it is true that certain debts are not discharged by a Chapter 7 filing, debtors should understand that the debts, which the Chapter 7 filing can address, are often the ones that can have a long-lasting effect on that debtor's finances. Therefore, it may be a wise decision for the debtor to consult an experienced bankruptcy attorney in order to resolve issues and questions about Chapter 7 bankruptcy. After clarifying everything, the debtor may be able to make a decision, which can enable the debtor to obtain effective debt relief.

Source: FindLaw.com, "Debts that Remain After a Chapter 7 Discharge," Accessed on Aug. 18, 2015

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

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