What is a dischargeable debt?

A dischargeable debt is a debt that can be eliminated or forgiven by a bankruptcy court in North Carolina. In other words, a dischargeable debt is one that can be removed from a person’s credit report after they have declared bankruptcy. This type of debt is different from non-dischargeable debt which cannot be erased in this way. Dischargeable debt can include most types of consumer debt. This typically includes credit card debt, medical bills, personal loans, utility bills, and other debts incurred through the purchase of goods and services. However, there are certain activities that can render certain debts non-dischargeable. For example, in some cases, fraud can make a debt non-dischargeable. In North Carolina, those filing for bankruptcy must complete a “Means Test” to determine the amount of debt they are able to discharge. This test looks at a person’s income and other factors to decide how much of the debt they will be allowed to discharge. Some debt may also be discharged through a process known as “Lien Stripping” where the amount of the debt and the lien securing it are legally separated. Overall, dischargeable debt can ease the burden on those weighed down by considerable debt. While it may not erase the debt entirely, it can still help those struggling with debt get back on solid financial footing.

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