Individuals or businesses in Maryland may suffer from excessive debt, and the ability to pay proves impossible. Filing for bankruptcy might be the solution for stressed debtors since many obligations face discharge. However, not all debts are dischargeable.
Discharged debt in bankruptcy
A discharged debt receives a permanent injunction, which means the creditors can no longer attempt to collect. Any attempts to collect discharged debt could lead to legal troubles. The debtor has no legal obligations to pay.
When someone passes the required means test and files for Chapter 7 bankruptcy, non-exempt assets face liquidation, and some debts may end up being discharged. Unsecured debts, such as personal loans and credit card balances, often undergo discharge orders. Chapter 13 bankruptcy involves payment plans, and many remaining unsecured balances will be discharged upon the completion of the plan.
Alimony, child support and certain unpaid taxes are not dischargeable. Other debts aren’t eligible for release, either.
Debts not discharged in bankruptcy
Several other debts may not undergo a bankruptcy discharge, including judgments based on wrongful deaths resulting from DUI crashes or debts related to losses from malicious or willful injury.
Errors and omissions could cause issues for those who make mistakes. For example, debtors should not expect to receive a discharge on debts not listed in the bankruptcy filing.
Regardless of discharge exemptions, bankruptcy might provide reliable solutions to those unable to pay their obligations. Someone unable to work due to a serious illness might find medical and other bills insurmountable, and filing for Chapter 7 or 13 could address the problems.