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The goal of filing any type of bankruptcy is to help a person obtain a reset on their finances after they’ve occurred more debt than they could realistically pay off on their own. During the process of bankruptcy, some debts are discharged, meaning the person in debt is no longer required to pay it and the loaner is unable to pursue any more payments for it.
After a debt is discharged, loaners can no longer:
- Take collection actions
- Take legal action for the debt
- Communicate with the debtor
However, having a debt discharged doesn’t mean a person doesn’t have to pay anything to do so. Likewise, not all types of debt are eligible for being discharged. If you are considering filing for Bankruptcy in Massachusetts, it’s best to speak with an attorney about your situation. At Miller Law Group, P.C., we’ll listen to your needs and help you decide what path toward discharging debts is right for you.
Call our Massachusetts bankruptcy lawyers now at (508) 502-7002 for a free initial consultation. We’re here to help you discover your options and regain financial freedom.
Debt Discharge with Chapter 7 Bankruptcy in MA
When a person files for Chapter 7 bankruptcy, they’re opting for an option that’s known as liquidation bankruptcy. This option is available to those who don’t have enough income to reasonably pay off their debts. During Chapter 7 bankruptcy, a person discharges their debt by liquidating their assets. During liquidation, a person will negotiate with loaners to discharge their debt. Notably, only debt that is unsecured can be discharged. Unsecured debt is anything that isn’t backed by collateral. For example, a person can’t discharge debt for their home because that loan is backed by the home itself.
Debt Discharge with Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a method for discharging debt for those who make enough money to pay off their debts using a special plan. Notably, Chapter 13 bankruptcy doesn’t use liquidation to help a person discharge debt. Instead, a person filing for Chapter 13 bankruptcy negotiates with loaners and a bankruptcy court to restructure their debt with a payment plan that they can manage. Once they’ve finished their payment plan, their debt will be discharged.
How Long Does Debt Take to Discharge?
The amount of time it takes to discharge debt depends on the type of bankruptcy a person is using. Discharging debt during Chapter 7 bankruptcy generally takes a few months. However, the length of time it takes to discharge debt with Chapter 7 bankruptcy depends on the unique situation of each person.
When a person discharges using Chapter 13 bankruptcy, their debt won’t officially be discharged until after they’ve completed their payment plan. This usually takes between three and five years but could take longer depending on a person’s situation.
What Debts Can Be Discharged During Massachusetts Bankruptcy?
As mentioned above, only unsecured debts can be discharged. A secured debt is one that is backed by a collateral. So, if a person has a car loan that they cannot pay, this debt cannot be discharged since their vehicle is the loan’s collateral. When a loan is backed by collateral, the item that loan is for can be subject to repossession by the loaner. In some instances, creditors are will be willing to restructure loans back by collateral to help a debtor pay them off.
Dischargeable unsecured debts can include the following
- Tax debts*
- Child support
- Personal injury claims
- Personal loans
- Medical debt
- Credit card debt
*Tax debt is only dischargeable under specific circumstances.
Call Our Massachusetts Debt Discharge Lawyers Now at (508) 502-7002
One of the most important aspects of bankruptcy is choosing the plan that’s right for you. Our bankruptcy lawyers are ready to help you decide if bankruptcy is right for your situation. Then, we’ll work to protect your interests, your property, and your rights throughout the process. Bankruptcy is supposed to enable your future financial freedom—we’ll work to make sure it does that for you!
Our team is available right now (508) 502-7002 to answer your questions about debt discharging. We’re ready to help you take your first steps toward being debt free!
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