You did not commit fraud or willful evasion.Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy The bankruptcy court MAY discharge your tax debt if ALL of the following elements are met: Can Tax Debt Ever Be Discharged Through Chapter 7 Bankruptcy? There are certain exceptions to these rules, however. Property settlements in divorce or separation proceedings.Debts for willful and malicious injury to property.Certain tax-advantaged retirement plansįurthermore, there are certain debts that CANNOT be discharged under Chapter 7 but MAY be discharged under Chapter 13:.Fines and penalties for violating the law.Debts for personal injury or death caused by debtor's operation of a motor vehicle.Accordingly, most unsecured debt, like credit card debt, CAN be discharged in bankruptcy. The main reason behind bankruptcy is to give the debtor a fresh start.
Many times, because of court-ordered payment plans and consequences to credit scores, what happens after Chapter 7 bankruptcy depends on what debt is discharged in the bankruptcy. What CANNOT Be Discharged Under Chapter 7 Bankruptcy? The trustee will also notify creditors advising them that there are no assets to pay. If, however, there is no exempt property, the trustee will inform the bankruptcy judge where the judge will likely enter an order discharging your debt. If you have non-exempt property, the trustee will try to auction or sell those assets to pay creditors. 5) The trustee will sell non-exempt property and finalize no-asset cases. You should note the bankruptcy court will not discharge your debts until you complete these courses. A post-petition financial management course.If you file for bankruptcy, you will need to complete two courses. 4) You will need to take credit counseling and financial management courses. After you file for bankruptcy, you will receive a notice that informs you where and when this meeting will be held.Īlthough creditors are also allowed to attend this hearing, in most cases they don't do so. The trustee will call a meeting of creditors ( sometimes also referred to as the 341 meeting) to speak to you about your financial situation. 3) The trustee will call a meeting of creditors. Wage garnishment occurs when some amount of your monthly income is taken from your paycheck to pay to your creditor.īankruptcy laws provide that any debtor can bring a civil suit against a creditor for willful violation of the automatic stay and can recover damages. Ensure your creditors don't come after you for car loans, unsecured debts, and other non-exempt property.It bars lenders from taking any collection actions and coming after your property. 2) An automatic stay will come into effect.Īn automatic stay is vital protection granted by the U.S. The trustee will also oversee the process of selling your non-exempt assets and distributing the proceeds to creditors. The trustee is responsible for managing your bankruptcy estate. These include: 1) You will be assigned a bankruptcy trustee who will oversee your filing.Īs soon as you file for bankruptcy, a trustee will be assigned to your case.
What Happens After You File for Bankruptcy?Īfter you file for Chapter 7 bankruptcy, a number of things will happen.
This article answers some of the frequently asked questions on what happens after filing for Chapter 7 bankruptcy.
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