What Type of Debts Can California Bankruptcy Discharge? - Westgate Law

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What Type of Debts Can California Bankruptcy Discharge?

Debt is something of a nasty word in today’s society. It is on the tip of everyone’s tongue when it comes to our nation’s financial health, so is it really that surprising to hear that a large percentage of American households are struggling to stay afloat amongst overwhelming debt? The lure of the 0% interest rate credit card is nearly impossible to resist when there are bills to pay, shoes to buy for the kids, and vacations that were planned before your company downsized. Millions turn to credit as a solution for a lack of actual funds every day. The problem comes when the “introductory interest rate term” is over and the interest rates jump astronomically. The balance, instead of decreasing with each minimum payment, seems to grow larger.

It’s the life cycle of credit card debt. And it’s a problem that many solve with bankruptcy. Filing for Chapter 7 bankruptcy means a discharge of credit card debt completely.

Anyone filing for the discharge of their debts needs to be completely clear that, while credit card and revolving debt can be discharged completely through the bankruptcy process, there are debts that bankruptcy will not touch.

California bankruptcy discharges MOST past debts, but it’s important to know which will be left behind afterwards before making plans for life after bankruptcy. For instance, domestic obligations (like alimony or child support) or restitution payments as a result of a crime committed would not be discharged by bankruptcy.

In addition, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, called into question the discharge of student loan debt. (Although the Congressional bill known as the Fairness for Struggling Students Act makes exceptions for private student loans). For additional information on student loan debt and bankruptcy, contact a bankruptcy attorney.

One other potentially substantial debt that many wish to discharge is tax debt. It can sometimes be reduced or discharged. It depends upon the circumstances. One problem that cannot be handled by filing bankruptcy is if taxes were never filed. There’s no way you’ll get tax debts removed for years in which you failed to file your return.

If you have questions about which of your debts are eligible for discharge through bankruptcy, contact the southern California bankruptcy attorneys at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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