Discharged Debts
Discharged debts offer business owners a chance to start fresh it is old debts that a debtor is no longer required by law to pay. For bankruptcy purposes discharge is the legal eradication of a debt . Bankruptcy releases the debtor from the personal liability or we can say that the debtor is not liable to pay any type of debts that are discharged, It prohibits creditor for taking any collection action on discharged debts which includes communication like telephone, letters and legal action . Discharge is only allowed for certain debtors and for certain debts .
Mainly Chapter 7, Chapter 11, and Chapter 13 deals with discharge debts and bankruptcy
Chapter 7 deals with the straight bankruptcy in this debtor gives up non-exempt property and debt discharge. There are certain debts that are not dischargeable under this act which includes:
1. Debts resulting from fraud, misuse of funds, embezzlement .
2. Debts that arise under false pretenses which includes false financial statements.
3. Debts for certain taxes.
4. Certain debts that comes from purchase of luxury items or cash advances.
Chapter 11 deals with business reorganization and protection from creditors while business devises a plan of reorganization. The debts which are not dischargeable under Chapter 13 are :
1. Criminal fines and restitution
2. Obligation not listed on debtor?s bankruptcy schedule
3. Student loans
4. Debts for spousal maintenance, alimony and child support
Chapter 13 related to plan which is prepared by the individual to pay a percentage of debt based on the ability to pay.
Advantages of filing bankruptcy-
Whether filing for bankruptcy or not is depends upon the nature of the debts but if someone files for bankruptcy he may get some benefits or we can say that there are some advantages behind bankruptcy first is that one can discharge from all or most of his debts it means he has not to pay any of the money owned to creditors and which allow him to start again. Bankruptcy can prevent foreclosure on property and repossession of a personal vehicle and you will be allowed to continue payments for the possession of vehicle or to keep property with you. Bankruptcy also prevent from the harassment by creditor for debt collection . Now one can file for bankruptcy online with the wide availability of bankruptcy form processing services on internet . Filing of bankruptcy now became easy and the process also saves time. For filing for bankruptcy you even do not require hiring a bankruptcy attorney to help you with the procedure if you already know the legal requirement associated with the filing and document required for filing for bankruptcy. The cost involved in filing online also vary like if you file for chapter 7 or chapter 13 of bankruptcy then you have to pay around 200 dollars or less and if your filing is complicated and you think you cannot do it yourself then it is better you hire a attorney for filing for bankruptcy and it is very easy these days to search for a attorney but he may cost you more so filing online is best option it saves not only money but also time .
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