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Ability to pay off discharged debts and Chapter 7 protections

When people file for bankruptcy, they might assume that the debts they owed are done away with. While that is the case for many debts, there are some exceptions to the rule that our Pennsylvania residents should be aware of. Student loans, for example, aren't usually discharged in a bankruptcy.

Even when debts are discharged, some people might wonder if they can still pay for them. That might be the case if the debt is to a trusted professional, family member or friend. Paying the debt off might be a way for the person to save their reputation. That desire to pay off discharged debts doesn't give creditors the right to try to pursue debtors for debts that have been discharged.

Whether a person pays off a debt or opts to just let it go, there are certain protections the person can claim. For example, a person can't be fired because of the inability to pay debts. This extends to having debts discharged in bankruptcy. An employer can't tell an employee to pay a debt that was discharged or risk being fired. In other words, people who file for bankruptcy can't be discriminated against in regards to employment.

For some people, paying off debts is a matter of doing the right thing. For those people, filing bankruptcy might be a way that enables them to pay the debts on their own terms. Those who are considering filing for bankruptcy should work to understand exactly how the debt discharge will affect them. From the financial aspects to the moral and ethical considerations, fully understanding what you are doing is vital for all debtors.

Source: United States Courts, "Discharge in Bankruptcy" Dec. 16, 2014

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