This is the whole purpose of filing Chapter 7 Bankruptcy to begin with. Getting rid of overwhelming debt. Many people want to know, well what can I include in a Chapter 7 Bankruptcy? Can I get rid of medical bills? What about trade payables? What about utilities even?
The list of debts that can be discharged is rather lengthy. But, here are a few; credit cards, unsecured loans, medical bills, deficiencies on auto or home loans, utilities, leases, or other miscellaneous contracts for goods or services.
Do I have to return the things I purchased on a credit card to the credit card company? No, unless it is secured, the items purchased are your property. If the card is secured, the credit card company would have an interest in the collateral attached to the card. This is rare.
With utilities, we can wipe out a utility but Section 366 of the Bankruptcy Code requires you to pay a deposit for continued usage. For example, say you owe the electric company 5k in back service charges. That debt is discharged in the Chapter 7 Bankruptcy. However, under Section 366 of the Bankruptcy Code debtor is required to pay a deposit for continued usage or utility if free to discontinue your service without running afoul of Section 362 or 727. Now, they couldn’t collect on the prepetition debt but they wouldn’t have to offer you future service either.
One other caveat is in order. While your liability for the above debts goes away upon receiving your Chapter 7 discharge, if there is a joint debtor responsible on this debt, the joint debtor’s liability remains intact.
When the time is right, or when you are ready, reach out to Minnesota’s HIGHEST GOOGLE REVIEWED BANKRUPTCY LAW FIRM at www.kainscott.com. You will be glad you did!