When filing for Chapter 7 bankruptcy, who you owe money to matters. This is because not all debts can be discharged as part of these proceedings. To ensure that filing for bankruptcy will ultimately give you the financial fresh start that you are looking for, it is important to first take a close look at what type of debts you owe.

Understanding Which Debts Can Be Discharged

If your debts qualify for discharge as part of your Chapter 7 bankruptcy, you will not be held financially responsible for paying these debts once your case is concluded. Furthermore, your creditors will not be able to legally contact you to try and collect these debts. Dischargeable debts include credit card debt, past due utility bills, debts owed to individuals such as friends or family members who may have loaned you funds in the past, and medical bills. 

Even if you complete the bankruptcy process, you will still be required to pay certain types of debts. These debts are typically referred to as non-dischargeable debts. This category of debt includes child support payments, student loans, and any recent tax debt that you may have. You will also be unable to discharge any debt relating to a home or vehicle which is used to secure that debt if you wish to keep that property as part of your bankruptcy settlement. For instance, you will not be able to discharge past due mortgage payments if you wish to keep your home.

Timing Matters When Determining What Can Be Discharged

In addition to the type of debts that you owe, when you choose to file for bankruptcy can also have an impact on your financial situation once the bankruptcy process is complete. This is because only debts that are incurred before your file your initial petition can be discharged by the court. For example, if you file for bankruptcy on January 1st, any overdue utility payments before that date can be discharged as part of your bankruptcy settlement. However, any utility charges that you incur during the time in between when you file and when you ultimately settle your case will not be eligible for discharge. 

Exploring Other Types of Bankruptcy 

If the types of debts that you owe cannot be adequately resolved through the use of Chapter 7 proceedings, this does not mean that filing for bankruptcy is completely out of the question. Working with a bankruptcy law service can help you to determine if you may be better served by a different type of bankruptcy, such as Chapter 13 bankruptcy.