What Debts Are Covered By Bankruptcy?
Bankruptcy forgives certain types of debts. In Chapter 7 bankruptcy, eligible debts are completely discharged (wiped clean). In Chapter 13 bankruptcy, you repay a portion of eligible debts and the remainder is forgiven at the end of your payment plan.
Roose Law PLC can advise on which debts are dischargeable so that you know before you file for bankruptcy where you stand. Attorney Adam Roose works to discharge the maximum amount of debt to provide as much relief as possible.
Bankruptcy allows for the discharge of unsecured debts. “Unsecured” means the debt is not backed by collateral (like a car loan or home mortgage). In Chapter 7 bankruptcy, you can generally discharge:
- Credit card balances
- Medical bills
- Utility bills
- Personal loans
You can also discharge mortgage arrears, car payments and other secured debts in Chapter 7 bankruptcy if you are surrendering the property.
Discharge is more complicated in a Chapter 13 bankruptcy. Unsecured debts are designated as priority or nonpriority. Priority debts are paid first and if there is money left over at the end of the payment plan, it goes to satisfy nonpriority debts. Any remaining unsecured debts are discharged.
The following debts are generally not eligible for bankruptcy discharge: child support and alimony obligations, criminal fines and restitution, recent taxes, condo or co-op fees, judgments from personal injury lawsuits, and debts that were not reported in your filing. You are still responsible for secured debts, including any past due house payments and car payments.
Possibly Dischargeable Debts
Some debts that are normally not eligible can be discharged under specific circumstances. It may be possible to discharge:
- Unpaid income taxes that date back three or more years
- Student loan debts if you can prove an extreme hardship
- A second mortgage in a Chapter 13 bankruptcy (“lien stripping”)
Adam Roose can gauge whether you qualify to have any of these debts included in your bankruptcy petition.
We Aim To Eliminate As Much Debt As Possible
At Roose Law PLC, we don’t pass judgment on how you got into debt. Our only concern is helping you get out of debt. In your free initial consultation, Adam Roose will explain which of your debts qualify for bankruptcy relief. Call us today at 248-331-1200 or contact us by email, and we will respond soon.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.