Types of Dischargeable Debt in Michigan

What does it mean to have one's debt discharged?

When an individual is unable to repay their debt over a manageable period of time, it may be time for them to explore their financial options. One of the most practical solutions would be to file for bankruptcy, as this would effectively allow them to discharge most, if not all, of their debt. But what exactly does it mean to "discharge" debt through bankruptcy? Well, this essentially means that the court would have the power to rid you of all applicable debts—including credit card debt, past-due rent and medical bills—and subsequently relinquish you of the legal responsibility to repay your creditors. It is important to understand that not all debts are dischargeable, however, as you may still need to repay certain debts after the bankruptcy process has been concluded. For this reason, we encourage you to learn more about the difference between dischargeable and non-dischargeable debt.

Why are certain debts "non-dischargeable?"

Although bankruptcy is a practical way to rid yourself of overwhelming debt, you must understand that this will not necessarily free you of all financial obligations. Certain debts are considered to be "non-dischargeable" under the U.S. Bankruptcy Code for a variety of reasons. First, the bankruptcy court is prohibited from waiving specific types of debt—including state and federal taxes, overdue child support and student loans. Second, the judge can choose not to discharge certain debts if they believe that the petitioner has attempted to defraud the court, either by racking up new debt immediately before filing or concealing valuable assets. Finally, all debts that have not been included on the filer's petition will be barred from discharge—regardless of whether or not they would have otherwise qualified. For this reason, it is highly recommended that you retain the help of a Michigan bankruptcy attorney.

Examining the Types of Dischargeable Debt in Michigan

When filing under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code, you will have the opportunity to discharge any applicable debts once the process has been concluded. Although you would be able to find relief much quicker through a Chapter 7 bankruptcy, you would still have the opportunity to rid yourself of remaining debts once you have executed a financial plan through Chapter 13.

Types of Non-Dischargeable Debt in Michigan

Although you would be able to obtain a substantial amount of financial relief once you have filed for bankruptcy, it is important to understand that you may still be held accountable for repaying certain debts after the process is over. Since some debt is considered to be "non-dischargeable," you would be legally responsible for paying back the creditors to whom you owe this debt.

Speak with Our Michigan Bankruptcy Lawyer Today

If you are interested in learning more about the difference between dischargeable and non-dischargeable debt, Hensel Law Office, PLLC encourages you to contact our Michigan bankruptcy lawyer today. In doing so, you will have the opportunity to discuss the specific nature of your case with a legal professional who understands the in's and out's of this complex process. We are available to schedule weekend and evening appointments.