Will charged-off credit card debts be nondischargeable in a Chapter 7 because the debtor overstated income on the credit card applications?

UPDATED: May 28, 2012

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Will charged-off credit card debts be nondischargeable in a Chapter 7 because the debtor overstated income on the credit card applications?

The debts are2-3 years old (grown from $15K to $20-$25K; card credit limits ranging from $300 to $6000). Would it be unwise to file bankruptcy in this case? There are also unpaid medical bills ($2200), cash advance loans ($5100), a charged-off private student loan ($5700), and a 6-figure federal/state student loan debt. The debtor’s current income is $20,000.

Asked on May 28, 2012 under Bankruptcy Law, Texas


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Under federal bankruptcy laws, the only way certain debts cannot be discharged is if the debtor claims fraud with respect to them or under the law such debts cannot be discharged such as child and spousal support obligations.

With respect to the matter you are writing about, your debts in a Chapter 7 bankruptcy assuming you file for such protection will most likely be discharged unless one of your creditors files an adversary complaint claiming that for certain policy reasons under the bankruptcy code that your debts should not be discharged.

Unless some creditor has claimed that you have engaged in fraud, the chances of a bankruptcy discharge seems likely from what you have written. I suggest that you consult with a bankruptcy attorney further about your intent.

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