Edward G. Lawson

Attorney At Law - Bankruptcy - Divorce - Real Estate

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Bankruptcy Discharge

Bankruptcy is a process created by federal law that provides relief for debtors to either eliminate or repay all or a portion of their debts in an orderly manner within one’s budget. It surpasses non-bankruptcy consolidations and other similar schemes by being the one sure way to eliminate or reduce debt and achieve a true fresh start.

Chapter 7 “liquidation” is the process by which debtors wipe out or “discharge” many of their debts. Chapter 7 is known as “straight” bankruptcy. In most cases, your assets are exempt from liquidation to satisfy your debt. Chapter 13 “reorganization” is the process by which an individual or a business prepares a plan for repayment to creditors of all or a portion of debt. A Chapter 13 plan can prevent a foreclosure and provide for the repayment of mortgage arrearages on a debtor’s home while at the same time allowing the debtor to seek a mortgage modification.

Can a Chapter 7 debtor truly “wipe out” all of his or her debts?

Discharge of indebtedness is the process by which a Chapter 7 debtor eliminates debt during bankruptcy proceedings. A creditor or lender can never attempt to collect a debt that has been discharged. The debtor is freed from that financial obligation. For example, a Chapter 7 debtor usually can discharge personal or unsecured loans, medical bills, most credit card debt, and some “old” taxes. However, not all types of debts can be eliminated in a bankruptcy proceeding. These are “non-dischargeable” debts.

Which debts does a Chapter 7 debtor remain liable?

Bankruptcy does not always eliminate all debts. The following types of debt cannot be discharged in Chapter 7 bankruptcy:

  • Alimony or spousal maintenance* Child support
  • Debts incurred by fraud or dishonesty
  • Debts incurred by fraud while acting in a fiduciary capacity, such as a trustee
  • Embezzled sums
  • Debts that the debtor fails to include or list on the bankruptcy “schedule”
  • Recent unpaid taxes
  • Debts incurred in violation of securities fraud law
  • Fines or penalties imposed by government agencies, including criminal fines
  • Claims due for accidents incurred due to driving while intoxicated
  • Most student loans
  • Debts incurred after filing for bankruptcy
  • Most larger purchases made shortly before filing bankruptcy, especially for luxury goods or services

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Here To Serve You

With nearly 46 years practicing law and decades of real-world business experience, the Law Offices of Edward G. Lawson provides effective, efficient legal services to businesses throughout:

  • Rhode Island
  • Massachusetts

We can accommodate clients at our Pawtucket location or we can meet you at your office to address your legal matters. Call (401) 725-1810 or (800) 511-1347 or contact us online today to schedule your initial consultation.

Disclaimer

This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

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Law Offices of Edward G. Lawson
260 Lonsdale Ave
Pawtucket, RI 02860
Phone: 401-725-1810
Phone: 800-511-1347
Fax: 401-725-2244
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