Credit card debts are likely the greatest category of debts that consumers seek to have discharged in bankruptcy court. And, fortunately for them, credit card debts are typically discharged once the bankruptcy is approved, barring intentional misrepresentation.
Prior to registering for bankruptcy, it is essential that you have not racked up large and unusual credit card debts. This may indicate to the court that you knowingly attempted to maximize your credit card benefits prior to registering for bankruptcy in an effort to have them discharged. This is viewed negatively by the court, which considers it to be deception.
A second reason why many people file for bankruptcy is a family member's fatal illness. Perhaps your child's illness has resulted in tens or hundreds of thousands of dollars in medical expenses. Many individuals who are unable to repay these debts file for bankruptcy in the aim of having them discharged. Fortunately, medical expenditures are dischargeable in the event that your bankruptcy petition is accepted. The amount of unpaid medical expenses discharged by bankruptcy courts is measured in the billions of dollars.
If you have been sued by a creditor and lost the case, the court permits the creditor to collect the money he is owed in a variety of ways. He can garnish your wages, place liens on your properties, and garnish your bank accounts, among other things. Upon filing for bankruptcy, however, the majority of these debts become legally dischargeable.
The same holds true for all executed contracts. For instance, if you have entered into a car lease or a membership program that requires a certain number of payments, these debts are dischargeable.
There are numerous additional types of debts that can be discharged. To determine which of your debts are dischargeable, you will need the assistance of a state-specific expert on how bankruptcy works in your state. However, as a general rule, if the debt is not an income tax debt, does not involve child or marital support, or is not a secured debt such as a mortgage or car loan, the debt is likely dischargeable.
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