Chapter 7 bankruptcy question.

Edwards Finance > Loans

Q. I am in a civil suit and expect to settle out of court with a large financial settlement against me. I will not be able to pay the settlment amount. Will Chapter 7 relieve me from this debt? I read somewhere that CRIMINAL debts are not relieved. However this is in CIVIL court and I am trying to settle out of court.

A. It may become important for you to note that (and how) your statement above conflates two different kinds of obligation -- namely, whatever it was that plaintiff contends (and what you appear implicitly to acknowledge) creates the underlying obligation sued upon and what you will have agreed if you enter into the "settlement" (which you seem also to be suggesting you now plan not to honor) -- and that, if the claims/amounts are substantial, both these issues would have to be analyzed to provide what, for you, will be the least unreliable answer. Further, whether Ch. 7 is the best option for you is also not determinable just on the basis of your present factually skeletal posting. Most civil debts are discharged in bankruptcy. Some exceptions are those that were as the result of fraud. Such debts may be able to be discharged in a Chapter 13. I *strongly* recommend speaking with a local bankruptcy attorney. He or she can review the court papers and your situation and let you know your options.

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