When people struggle to shoulder their debt, it can be practical to seek solutions to relieve the financial burden through bankruptcy. This option can help in different scenarios, including individuals and businesses going through challenging times. Filing for bankruptcy can initiate the process of managing debt and discharging it when possible.
However, this process can have limitations, depending on the circumstances. Different bankruptcy types can have rules when approaching loans and deeming them dischargeable. In most cases, the following types of debt may not be eligible for discharge:
- Financial obligations brought about by court orders, such as child support
- Overdue taxes, including liens and payments owed to the government dating back years
- Money owed to another individual brought by injury claims and other similar cases
- Debts incurred because of damages from motor vehicle accidents
- Loans and other overdue payments the debtor failed to include in the bankruptcy case
Still, the conditions necessary to allow discharges can change according to the bankruptcy’s details and variation. For example, some Chapter 13 cases can allow discharge for debt related to injury or property damages. But the court often grants them based on the situation, possibly shifting from case to case.
Seeking discharge appropriately
Receiving debt discharge can benefit debtors because it may lighten their financial burdens. Aside from restrictions imposed by the bankruptcy process, details and requirements can also impact whether discharge is possible. Sometimes, procedural mistakes and discrepancies can affect eligibility or the process’s outcome.
Before filing for bankruptcy, seeking legal guidance can be helpful. Valuable advice can also help debtors navigate and maximize the process while addressing any issues that may arise along the way.