How Does Dischargeable Debt Affect the Decision of Whether to File for Oklahoma Ch. 7 Bankruptcy?

Enough Debt – Make Bankruptcy Worth It

Video Transcribed: Hello everybody, Edward Kelly here, your OKC bankruptcy attorney with another 3 Minutes to Financial Freedom. As always, we’re going to do one of these videos every weekday, Monday through Friday. So this is video 3 in this series.

We talked about what are the factors that determine whether Chapter 7 is right for me. Yesterday we talked about my income. Is it above or below the median? And we talked about what that is. The second factor is what kind of debt I have. And this is merely a calculation of whether your debt is dischargeable. Meaning, can we get rid of it in this bankruptcy?

Most debts are dischargeable. They may or may not be attached to the property. If they’re attached to a property, you may have to give up the property. We’re going to talk about that tomorrow. But most debts, your credit cards, your signature loans, are unsecured debts that just go away in bankruptcy. Medical bills, utilities that you’re not going to continue using. Basically, all of your normal bills are dischargeable in bankruptcy.

Again, if you have a car note, you may have to give the car up if you want to get rid of that debt. But then that debt is just an unsecured debt like any other, totally dischargeable. Here’s what’s not dischargeable. It’s an easier way to look at it. Child support, never. Court costs and fines, almost never. Some civil penalties fit in there. We’ve got student loans. If they are federally backed by the government, guaranteed student loans. Not dischargeable at all, at least at this point. And there are some other special debts. Taxes that are less than three years from the date they were filed. Some taxes like wages, and FICA, are never dischargeable.

So, the second thing you want to look at, is what kind of debt do I have. Is it all dischargeable? If I can’t discharge any of it, whether this is right for me goes to the negative side. If I can get rid of a good chunk of my debt, even if there’s debt left over, if I can get rid of a considerable chunk, then Chapter 7 is probably right for me.

We’ll be back tomorrow with the third factor determining whether Chapter 7 is right for you, which is what my property situation looks like. As always, you can reach me, an Oklahoma Chapter 7 lawyer, directly at edwardkelleylaw, K-E-L-L-E-Y, law at gmail.com, or give me a call at 580-478-3130.