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When an individual or business files for bankruptcy, it’s generally because they are looking to get a handle on their debt and/or are looking to get some or all of their debt “erased” so they can start with a clean slate. One way this is accomplished is by getting certain debts discharged.

When a debt is discharged during the bankruptcy proceedings, it “releases the debtor from personal liability for certain specified types of debt,” according to the United States Bankruptcy Court Southern District of Alabama. Essentially, what this means is that the debtor is no longer obligated to pay back what they owe.

While there are many types of debts that can be discharged such as credit card debt, certain types of loans, etc., there are also debts that generally cannot be discharged during the bankruptcy proceedings. According to the United States Bankruptcy Court Southern District of Alabama, the following types of debts usually cannot be eliminated when a person files for bankruptcy:

Student loans
Child support
Alimony
Taxes

If an individual or business files for bankruptcy and is carrying any of the following debts, it is unlikely that the court will allow these to be discharged.

An Alabama Bankruptcy Lawyer Can Determine What Types of Debts an Individual Has That Can Be Discharged

If an individual or business is considering filing for bankruptcy and wants to know which of their debts qualify for discharge, they can schedule an initial consultation with an Alabama bankruptcy attorney. The fact is, the type of bankruptcy filing an individual uses will play a large role in what happens to their debt. While there are some types of bankruptcy that allow an individual to get their debts discharged, excluding the types listed above, other types help them arrange a repayment plan with their creditors so that some or all of their debt is paid.

Business owners and individuals who need more information on filing for bankruptcy or have specific questions they’d like answered by a legal expert can contact Hill, Gossett, Kemp & Hufford, P.C. for legal help. The Alabama bankruptcy lawyers at Hill, Gossett, Kemp & Hufford, P.C. are available to help individuals understand the different ways they can file for bankruptcy and determine if they qualify to file.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11

Springville, Alabama 35146

Phone: (205) 467-2225

Acquiring debt is easy but getting out of it is the challenge. According to Bankrate.com, consumer debt was at $14.2 trillion as of November 2020, and Americans were “carrying an average personal debt of $92,727.” While some fall into debt trying to start a business, others let their spending get out of control, eventually landing them in a situation where they cannot afford to pay back even one lender who they borrowed from.

While there are certain methods individuals can use to get their debt under control such as obtaining a debt consolidation loan, there is also bankruptcy. Although there are different forms of bankruptcy an individual can file for, Chapter 7 is one of the more common forms used by individuals. With Chapter 7 bankruptcy, individuals are given the opportunity to discharge some or all of their debts which gives them a “fresh start,” according to the United States Bankruptcy Court Southern District of Alabama.

If an individual is drowning in debt, is being sued by one or more creditors, or is looking for a way to obtain a fresh slate, they can schedule an initial consultation with an Alabama bankruptcy lawyer to find out if they qualify for Chapter 7 bankruptcy.

Things to Know About Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often referred to as “straight bankruptcy” in Alabama.
If an individual qualifies for Chapter 7 bankruptcy, a trustee will be appointed to their case and will help them sell assets that are nonexempt. The money received for these assets will be used to pay creditors.
Although certain property may be protected from being liquidated, there is a chance that an individual could lose some of their property.
Chapter 7 bankruptcy is only available to certain types of business owners. If a business owner isn’t sure whether they would qualify to file for Chapter 7 bankruptcy, they can always consult with an attorney who can determine this for them.
Repayment plans are not a part of the Chapter 7 bankruptcy process. Instead, individuals will use the proceeds from their assets to pay their creditors and some or all of their remaining debt will be discharged.

Important: It is important for individuals to understand that certain types of debt cannot be discharged in a Chapter 7 bankruptcy and they would, therefore, still be obligated to pay the creditor in which they owe.

If an individual in Alabama is considering filing for bankruptcy and they would like more information or they want to determine if they qualify, they can contact Hill, Gossett, Kemp & Hufford, P.C. to speak with an Alabama bankruptcy attorney.