How to Get a Debt Discharged

As time goes by, an unpaid debt will age. Although a statute of limitations is present in each state that regulates the amount of time an individual or company has to file a lawsuit against you to recover the debt, that does not change the fact that you still owe it. The only true way to legally discharge an outstanding debt is to have that debt included in a Chapter 7 bankruptcy. If you file bankruptcy on your debt, the court may dispose of your legal liability to repay what you owe.

Instructions

1

Find out if the debt is eligible to be discharged in a bankruptcy. Some debts, such as unpaid child support, student loans and felony judgments cannot be discharged.

2

Compare your current annual income to the median household income for your state. If your annual income is higher than the median household income, you will not be eligible to discharge your debt in a Chapter 7 bankruptcy. You must also not have had a bankruptcy dismissed at any point during the last six months. The median household income for each state can be found on the U.S. Trustee Program's website.

3

Compare your debts to your assets. In a Chapter 7 bankruptcy, all of your nonexempt assets will be sold and the proceeds will be used to pay your debts. If your assets are worth more than your debts, a discharge of debt may not be possible.

4

Seek credit counseling with a government-approved credit-counseling agency. Although credit counseling may seem redundant if you are attempting to discharge debt rather than repay it, this is required by law before you will be permitted to file for bankruptcy.

5

File for bankruptcy at the county clerk's office. You will be asked to provide a list of your assets and income, your legal exemptions, your debts and a list of the creditors that you owe. You will then be notified of the date of your creditor meeting.

6

Attend the meeting of creditors. If you do not attend, your bankruptcy will be dismissed and your debt will not get discharged. Your creditors have the option to attend the meeting and question you about your financial situation.

7

Attend any following hearings that are scheduled to evaluate your case. The hearings scheduled may differ depending on the complexity of your bankruptcy. The standard Chapter 7 bankruptcy is complete after three months. Any outstanding debt owed beyond what your assets will cover will be discharged.