The type of bankruptcy you are eligible for and the category of a particular debt determines whether or not a debt can be wiped out by bankruptcy. Debts that are eligible for removal are known as dischargeable debts.For these types of debts, a bankruptcy discharge releases you (the debtor) from being required to pay the debt.The discharge also prohibits a creditor from taking any form of action against you, including legal action and communication such as telephone calls and letters.
There are several kinds of debts that cannot be discharged through bankruptcy, such as:
- Certain tax claims
- Spousal support
- Child alimony
- Willful or malicious injury
- Government fines/penalties
Section 523(a) of the Bankruptcy Code outlines the exceptions to bankruptcy discharge.
DEBT DISCHARGE VARIES DEPENDING ON BANKRUPTCY CHAPTER
Depending on how you file your bankruptcy, you may be eligible for different debt discharges. For example, Chapter 13 bankruptcy has a slightly broader choice availability of dischargeable debts than Chapter 7 bankruptcy. Eligibility for each chapter of bankruptcy is different, and under certain circumstances, a court can even revoke a debt discharge.
Under the 2005 Bankruptcy Act, debtors who file bankruptcy in Texas are required to undergo credit counseling within six months. Debtors are also required to complete a financial management instructional course after filing for bankruptcy. This process involves a great deal of preparation in gathering paperwork on income sources, financial transactions, and monthly expenses.
It is important for you to know your eligibility in your state before you move forward with a bankruptcy filing. Taking care in every step may help to ensure the process goes smoothly. Seek the guidance of an experienced Dallas bankruptcy attorney as you prepare your case and work to safeguard your future.