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Some debts may not be discharged in bankruptcy

Massachusetts individuals and couples sometimes consider bankruptcy when they don't have enough money to pay their bills. However, there are some important things to know about bankruptcy laws and what types of debts can or cannot be discharged.

Most unsecured debts such as credit cards, utilities, payday loans and past-due rent may be discharged. These debts often make up a large part of Chapter 7 bankruptcy claims. Chapter 7 bankruptcy could help a low-income individual or couple get a fresh financial start after job loss or a serious illness. Although there are some obvious benefits to filing for this type of bankruptcy, it's important to note that the court could sell a person's property to help pay back some of their debts before they are discharged.

For those who want to keep their home, vehicles and other valuable property but have trouble paying all of their debts in full every month, Chapter 13 bankruptcy may be an option. This type of debt relief may allow people to include some federal income taxes and debts related to marital settlements. Debts are not immediately discharged with Chapter 13 bankruptcy; individuals and married couples who choose this option enter into a payment plan that spreads the debts over several years.

Some debts are difficult to have discharged in bankruptcy. For example, student loan debt, federal taxes and homeowners association fees are typically not discharged. Although a person might qualify for an exception, the approval process may be long and potentially expensive. Those with these types of debts may consult with an experienced bankruptcy attorney for advice regarding how to handle these and other debts.

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