Aug 2015

What Debts can be Discharged in Bankruptcy?


Bankruptcy is an excellent tool to eliminate unsecured debt such as credit cards, medical debt, deficiencies resulting from foreclosure and repossession. These types of debts are discharged at the conclusion of the bankruptcy process in both Chapter 7 and Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, you may be required to pay a portion of the unsecured debt through your repayment plan.

However, not all debts can be discharged in bankruptcy. Child support and spousal support arrears, recent tax debts, and student loans are non-dischargeable, meaning the debtor is still liable for these debts even after the completion of the bankruptcy process. Further, if you have debts that are secured by property, such as a home or vehicle, you will have to continue to make payments on these items in order to keep them.

It is always a good idea to evaluate all your options prior to filing bankruptcy. An experienced attorney can help you decide if filing bankruptcy is the right decision and what Chapter of bankruptcy may be right for you.