Questions about bankruptcy?
What debts are discharged in an Olympia Chapter 7 bankruptcy?
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Assisting Chapter 7 bankruptcy clients in Thurston County, WA.
Will your debts be wiped out in an Olympia Chapter 7 bankruptcy?
What are the most common types of debts that can be discharged in an Olympia Chapter 7 bankruptcy?
The most common debts that are discharged in bankruptcy are “unsecured debts”. Unsecured debts are debts where there is no collateral, such as a house, car, furniture, or other property, to secure the debt. Examples of the most common types of unsecured debts that our Olympia bankruptcy clients completely wipe include the following:
Credit Card Debt:
Almost all credit cards are unsecured, and these usually are the largest amount of debts being discharged in a chapter 7 bankruptcy
Medical bills:
50% or more of people that file bankruptcy do so because of medical issues. Even if you have insurance, your share of the bill can be thousands of dollars. Medical collectors used to work more with people, but now they are very aggressive about being paid in full as soon as possible.
Personal lines of credit:
These are signature loans that someone might have with a bank that are based only on a signature.
Deficiencies:
When a house is foreclosed on, or a car is repossessed, there may still be money owing on the contract. This is called a deficiency, and it simply means there was not enough from the sale to pay off the entire debt. Usually a second mortgage is NOT paid in a foreclosure, and the second mortgage company will sue to collect on the debt.
The judgment on a second mortgage can be enormous, often $50,000 to $100,000 or more. Nowadays, there are between 7,000 and 10,000 foreclosures every day in the U.S., so if you find yourself in this situation, you are definitely not alone. We can help protect you from mortgage creditors who often demand more money than most people could ever afford to pay back.
Old Income Taxes:
In many cases we can help our clients discharge all or part of their taxes. The taxes have to be income taxes that were due more than three years ago (extensions affect this time period), have been filed more than 2 years before the bankruptcy, and there has not been a levy.
There are other important factors that have to analyzed as well. Taxes can be a very complicated issue, and it is important to have an experienced attorney who can help you. Our Olympia Chapter 7 bankruptcy attorneys are experienced in helping people with complicated tax issues.
If you have questions about whether or not your back taxes will qualify for discharge, we encourage you to call our offices for an initial consultation. One of our Olympia bankruptcy attorneys can review the specific facts and circumstances surrounding your old taxes and explain how we can help.