When you plan on filing for bankruptcy, understanding what debts you can include as part of your bankruptcy estate is critical to understanding what your financial situation may look like after your case is closed. If you’ve endured legal matters in the past with the help of an attorney and you still owe money, you may wonder if these legal fees can be discharged when you file. If this represents your circumstances, the following blog and a Memphis, TN consumer bankruptcy lawyer can help you navigate these complicated matters. Keep reading to learn what you must know.
What Is a Dischargeable Debt in Bankruptcy?
When you file for bankruptcy, it’s important to understand that you likely have several dischargeable debts as part of your estate. If you have dischargeable debts as part of your estate, you’ll find that as part of your filing, you will no longer be legally responsible for paying these debts back. Typically, these are unsecured debts like credit card debt, personal loans, and medical bills.
Not all debts are eligible to be discharged. These are often secured loans or loans that have collateral attached, like your auto loan or mortgage. Additionally, past-due taxes or restitution money owed to a crime or personal injury victim is ineligible for discharge.
It’s important to understand that if you receive a bankruptcy discharge, the creditor is prohibited from making collection efforts against you. As such, they cannot contact you regarding a debt or take legal action against you.
Can I Include Legal Fees as Part of My Bankruptcy Estate?
If you are filing for bankruptcy in Tennessee, it’s important to understand that you can include legal fees as part of your bankruptcy estate. This is because legal fees are considered an unsecured debt, meaning they are eligible for discharge. However, it should be noted that this does not include your current attorney’s fees, but any debts owed to lawyers from previous legal cases you have been involved in. When you file for Chapter 7 you will likely be required to pay in full before the discharge. If you choose Chapter 13, your legal fees for your bankruptcy attorney will be included as part of your repayment plan.
As mentioned, any attorney fees you owe from having your own representation can generally be discharged. It is important, however, to note that if you are responsible for paying attorney fees for a spouse or injury victim, you may not be able to eliminate these, as they are considered non-dischargeable under the bankruptcy code.
Bankruptcy can be incredibly complicated, and failing to include debts in your filing makes them ineligible for discharge. As such, it’s in you r best interest to work with an experienced bankruptcy attorney to assist you in this process. At the Arnold Law Firm, we can examine your situation to determine the best course of action so you can reap the full benefits of this process. Contact us today to learn how we can assist you in these matters.
