What types of debts can be discharged through Chapter 7 Bankruptcy?

In North Carolina, filing for Chapter 7 bankruptcy allows an individual to have certain debts forgiven or discharged. This means that creditors are unable to collect on the debts, and the debtor is no longer responsible for paying them. Many types of debt can be discharged in a Chapter 7 Bankruptcy. These include credit card debts, medical bills, personal loans, utility bills, and other unsecured debts. While some secured debts, such as a mortgage or auto loan, may be discharged, the debtor must give up the property used as collateral. In addition to unsecured debts, some tax debts can potentially be discharged, depending on when they were incurred. Generally, taxes must have been due at least three years prior to filing for bankruptcy and the return must have been filed at least two years before the filing date. In addition, some student loan debts may be eligible for discharge if a repayment plan cannot be devised or if the debtor can prove undue hardship. In any case, it is important to note that while some debts can be discharged through Chapter 7 Bankruptcy, not all debts are eligible. Secured debts, such as mortgages or auto loans, and other debts, such as child and spousal support, are not eligible to be discharged. It is important to speak with a qualified bankruptcy attorney to review which debts are eligible for discharge before filing for bankruptcy.

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