Discharge Debt With A Deerfield Beach Chapter 7 Bankruptcy Attorney
Last updated on February 19, 2025
Chapter 7 offers individuals with a high amount of consumer debt the opportunity to wipe the slate clean and get a fresh start. You don’t have to wait until you are completely broke and facing homelessness to do something about money troubles. Bankruptcy was written into the U.S. Constitution and offers protection to people in need. Chapter 7 lets you take back control of your finances and put an end to unbearable worry, stress and sleepless nights. If you are struggling with one or more types of debt described below, call the Law Office of Adam I. Skolnik, P.A., in Deerfield Beach. Attorney Adam I. Skolnik helps individuals and families in communities throughout Broward and Palm Beach counties make a fresh start. In Chapter 7, you can discharge your unsecured debts. Unsecured debt refers to debt that does not require collateral. There are several varieties, all of which you have the opportunity to discharge when you file Chapter 7.
Clearing Insurmountable Medical Debt
Medical debt is the leading cause of bankruptcy in America. Serious health issues can’t be ignored, regardless of the enormous cost of health care and the likelihood of a health crisis sending a family into debt. Medical bills can’t be blamed on irresponsible spending habits or bad money management. If a severe injury or illness saddled you with bills you can’t pay and put you out of work at the same time, bankruptcy can help. Medical debts can be eliminated in a Chapter 7 bankruptcy.
Get Freedom From Credit Card Debt
Medical debt only affects some people, but just about everyone carries some level of credit card debt on their backs. The average household holds over 10 credit cards, including gas cards and store cards, as well as major charge cards such as Mastercard and Visa. Credit cards are revolving accounts, meaning as long as you make the minimum payment each month, you can continue to maintain a balance without ever having to pay it off. Interest accrues on that balance, however, and at alarming rates. Some cards charge up to 25% in interest, and the balance on a card can quickly get out of hand and grow to proportions that are impossible to pay off. The average household carries over $10,000 in credit card debt from month to month.
Credit cards are easy to get, and they are heavily marketed to students and low-income people who are glad to have a way to pay for groceries, clothing and other necessary expenses. Credit card debt follows medical debt as the second-leading cause of bankruptcy, and at least some credit card debt is present in almost every bankruptcy filing. Fortunately, credit card debt, including medical debt, is unsecured and dischargeable in Chapter 7.
How Chapter 7 Can Help With Tax Debt
Federal income tax debts can be discharged in Chapter 7 if they meet certain criteria. Generally speaking, the debt must be associated with a tax return that had a filing deadline over three years ago, including extensions, and was actually filed more than two years ago. In addition, the assessment of tax has to be at least 240 days old. Finally, there cannot be any evidence of tax evasion or a fraudulent return related to the debt.
For other tax debts, filing bankruptcy can offer relief by eliminating other debts and freeing up disposable income to deal with debts that can’t be discharged. You can also pursue options such as installment payment plans or negotiate an offer in compromise to settle your tax debt for less than you owe. If you dispute the tax debt, litigation is another option.
Can You Discharge Student Loans In Chapter 7?
Despite what you may have heard, some types of federal student loans can be discharged in a Chapter 7 bankruptcy. Special rules apply to student loan debt, and it can’t be discharged as easily as, say, medical debt, credit card debt or a personal loan. Currently, only federal direct loans and direct consolidated loans are subject to discharge. To get a student loan discharged in Chapter 7, you have to prove that paying off the loan is an “undue hardship.” Courts used to apply strict standards and rarely found undue hardship, but that has been changing lately.
Student loans have been granted temporary forbearance and 0% interest during the current coronavirus pandemic. You can also obtain forbearance or stopped collection status while your application for the student loan borrower defense is pending. The borrower defense is one of the common causes of action Adam handles in his bankruptcy and debt litigation practice. In January 2015, the Private Student Loan Bankruptcy Fairness Act of 2025 was introduced in the House. If passed, then Chapter 7 could also discharge private student loans.
Clear Personal Loans From Your Past
A personal loan is a loan you get from a bank, credit union or other lenders that you can use to make purchases or pay off debt. For instance, people sometimes take out personal loans to pay off high-interest credit cards since the interest rate on the loan is typically lower than the credit card interest rate. Like any other debt, though, paying back the personal loan can become burdensome if you run into trouble due to a job loss, extended illness, major necessary expense or some other financial setback. However, personal loans are unsecured, meaning they are not secured by collateral such as a home or car. As unsecured debt, personal loans can be eliminated in bankruptcy.
Chapter 7 can also help if you are facing lawsuits or have a judgment entered against you, if your wages are being garnished at work, or if a creditor puts a lien on your property.
Get A Fresh Start With A Chapter 7 Bankruptcy Attorney’s Help
Call an experienced Deerfield Beach Chapter 7 bankruptcy lawyer today to find out how you can benefit from filing a Chapter 7 bankruptcy. Please call the Law Office of Adam I. Skolnik, P.A., at 561-934-9582 for a free consultation. You can also send Adam an email.
Adam Skolnik is a debt relief agent. He helps people file for bankruptcy relief under the Bankruptcy Code.