What debts you will never forgive in the United States, even if you declare yourself bankrupt
Declaring oneself bankrupt can potentially protect a person who has experienced serious debts and financial difficulties from creditors.
Therefore, bankruptcy can be a salvation for a drowning person, but it is important to understand that this procedure has its limitations, explains the publication The simple doll.
First, bankruptcy can have a very negative effect on a credit rating, making it difficult or even impossible to get loans in the future. In addition, there are certain debts that even bankruptcy cannot write off.
Debts that are written off due to bankruptcy
When you file for bankruptcy, there are a number of debts that are likely to be forgiven, given the situation. If you are applying for bankruptcy, according to the rules Chapter 7 (for this you need to qualify), these debts can be fully written off. In case of bankruptcy Chapter 13 you have to pay some of these debts.
These debts include:
- Unsecured loans;
- Credit card debt;
- Debts for medical services;
- Debts for legal expenses incurred by you;
- Debts for utilities;
- Unpaid rent.
Debts that are not exempt from bankruptcy
There are types of debts that are not written off in bankruptcy under any circumstances; however, some types of debt may be written off if a person has extreme conditions. There is also a third category of debts - these are theoretically debited debts at bankruptcy, but they can be left for you if the creditor proves the illegality of your actions.
Debts that are never written off, and bankruptcy in this case is no exception:
- Child support and child support payments;
- Creditors not specified in the application: debts to creditors who are not listed in your bankruptcy application cannot be written off, simply because the creditor does not know about your bankruptcy. Often, the application is not possible to specify the private lenders who lent you money;
- Government fines and penalties;
- Court-awarded payments and restitution;
- Debts related to injuries or death caused by driving while intoxicated (drug or alcohol);
- Housing and community fees.
Debts that can be written off under certain extraordinary circumstances:
- Student loans;
- Income tax.
Debts that may not be written off if the lender proves the illegitimacy of the borrower’s actions:
- Debts on loans and borrowings that you received because of fraud or fraud;
- Credit card debts or cash advances if you took a large amount shortly before filing for bankruptcy.
Impact of bankruptcy on credit history
Bankruptcy will appear in your credit history within hours of its approval. This information will have a negative impact on your credit rating over the next 10 years. In addition, each creditor you included in your bankruptcy application will update this debt information, indicating that it was written off due to bankruptcy. This information will be displayed in your credit history for 7 years.
Sometimes bankruptcy is really the best way out of the situation, but before you make this decision, you should weigh and think about everything.
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