Tag Archives: Chapter 7
If you receive a notice that one of your debts has been charged off, don’t start celebrating just yet. Charged off debt often gives borrowers the impression that they no longer owe that amount. However, while the debt does appear to be gone, “charged off debt” is not the same as “discharged debt”. What Does “Charged Off” Mean? A debt that has gone unpaid for more than 180 days will typically be charged off, which means that the creditor that holds the debt has taken it off of its accounting books. Since the debt has not been paid in some time, the creditor has no reason to assume that it will ever get paid back, and can therefore not continue to count it as an asset. However, just because they take it off of their account does not mean that they will not still be coming after you for it….
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When you go to file for bankruptcy, you will be asked to list all of the debts you have, including those that you don’t believe will be discharged. If you forgot to list a debt during Chapter 7 bankruptcy, whether or not the court will allow you to retrospectively add it to the discharge list depends on the following: If the creditor knew about the bankruptcy If leaving the debt out caused harm to the creditor If the omission was on purpose or accidental What Happens to Unlisted Debts in Chapter 7 Bankruptcy? Not listing a debt when filing for bankruptcy could potentially have some serious consequences. Leaving out information on bankruptcy petitions could be viewed as fraud, an offense that bankruptcy courts do not take lightly. The unlisted debt may not be discharged if it is not scheduled on your bankruptcy. You may be forced to pay a fine…
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When you are thinking about filing for Chapter 7 bankruptcy, you have several options, but before you commit, you should make sure that this form of bankruptcy is right for you. There are a few questions you should answer that can help determine the correct choice: Will creditors be able to claim your property if you do not file for Chapter 7 bankruptcy? In some circumstances, creditors will not have anything significant to take from you to satisfy your debt to them. For example, if your income comes from Social Security, which is a protected asset, and your property is exempt, creditors might realize that suing for judgment is pointless. In that case, filing for Chapter 7 bankruptcy is probably unnecessary. Do you have enough dischargeable debt to make bankruptcy worthwhile? If your debts mostly consist of things like child support, alimony, student loans in many cases, recent income taxes…
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