Discharged Debts on Credit Report

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You can get advice and guidance about resolving debt problems, including filing bankruptcy.

At the end of the bankruptcy case, the person receives a discharge, or court order, that eliminates most, if not all, of the person’s debts.

What Debts can be Eliminated by the U.S. Bankruptcy Court?

Bankruptcy discharges (or eliminates) most of your debts. The debts that are discharged include medical bills, credit card bills, old cell phone bills, judgments, old utility bills, debt on a vehicle that has been repossessed, and debt on a home foreclosure.

What Debts Cannot be Eliminated by the U.S. Bankruptcy Court?

Unfortunately, certain debts cannot be discharged. The debts that cannot be discharged include the following: Child support, some tax debt, most student loans, court-ordered fines, criminal restitution, debts obtained through fraud, homeowners’ association dues, or debts from willful or malicious injury to another person or their property.

Please contact the attorney for more advice as to what types of debts can be discharged in a bankruptcy case.

Can Older Tax Debt be Eliminated by the U.S. Bankruptcy Court?

It is important to remember that older tax debt can be discharged. Again, please contact the attorney for an answer as to whether tax debt can be discharged.

Even if your tax debt cannot be discharged in a chapter 7 bankruptcy, you may consider a chapter 13 bankruptcy case in which you pay back your tax debt over 3-5 years.

Can People Keep Their Houses and Cars?

You may want to keep certain debts, such as, mortgage loans and auto loans. No problem. Often, the creditor will send a Reaffirmation Agreement for you to sign that keeps the same terms that have always had and renders the debt non-dischargeable.

What about Student Loans?

Student loans are extraordinarily difficult to discharge. The bankruptcy code prohibits the discharge of student loans unless the loan poses an “undue hardship” on the debtor or his/her dependents.

The U.S. Bankruptcy Code does not define “undue hardship”. The leading case on defining “undue hardship” is Brunner v. New York State Higher Education Services Corporation.

This case set forth three (3) factors that the court must consider in determining whether the student loan can be discharged: (1) the debtor cannot maintain a minimum standard of living and still re-pay the student loans; (2) this inability to maintain a minimal standard of living must be likely to continue into the future; and (3) the debtor must demonstrate that s/he made a good faith effort to pay the loan in the past.

Thus, a person who is permanently disabled will stand the best chance of demonstrating to a court that the student loan poses an “undue hardship”.

What Should the Debt Look Like on Credit Reports After Bankruptcy?

It’s fine for a debt to remain on your credit report after the bankruptcy is over; however, the creditor must indicate that the debt was “included in bankruptcy” and the amount due must be reduced to “$0.00”. Anything else is wrong.

If you ever check your credit report after your bankruptcy is over and your credit report shows an amount due on a debt that was discharged in your bankruptcy, contact our office immediately and we will take action.

What Happens if you Receive a Bill or Lawsuit Paperwork from a Debt that was Included in Your Bankruptcy?

You may be able recover money from the debt collector or creditor. Basically, the creditor or debt collector is attempting to collect on an invalid debt.

It is common for creditors and debt collectors to continue to send bills after the bankruptcy is over. If this happens to you, contact my office immediately.

We will take action immediately and you will probably recover money from the debt collector that violated the discharge of the U.S. Bankruptcy Court.


Unsure of whether or not bankruptcy is right for you? Want to see if you are eligible for bankruptcy? I am ready to discuss all your options with you in a free case evaluation. Find trusted, dedicated advice today at John Steinkamp & Associates.

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