The information provided is for general informational purposes only and does not constitute legal advice. Every legal situation is unique, and you should consult an experienced attorney for advice tailored to your specific circumstances. For personalized assistance, contact our office directly.
One of the first questions many people have about bankruptcy is: Will it eliminate all of my debts? While bankruptcy can provide significant relief by wiping out many types of debt, there are some debts it cannot discharge.
As a bankruptcy attorney serving Sebring, Florida, I help clients understand which debts can be erased and what options exist for debts that cannot. Here’s a breakdown to guide you.
Debts That Can Be Discharged
Bankruptcy is most effective for eliminating unsecured debt—debt that isn’t tied to a specific asset. Common examples include:
Credit card debt: High balances, late fees, and interest can quickly add up, but bankruptcy can erase this type of debt.
Medical bills: Unexpected medical expenses are one of the top reasons people file for bankruptcy. Fortunately, they are fully dischargeable.
Personal loans: Whether from a bank, credit union, or online lender, unsecured personal loans can be discharged.
Utility bills: Past-due gas, electric, or water bills can also be included.
In Chapter 7 bankruptcy, these debts are typically eliminated within months. In Chapter 13 bankruptcy, they are addressed through a repayment plan, and any remaining balances may be discharged at the end of the plan.
Debts That Cannot Be Discharged
Some debts are considered nondischargeable under bankruptcy law. These include:
Child support and alimony: These obligations must continue to be paid, even after filing.
Most student loans: While difficult to discharge, student loans may be eliminated in rare cases of undue hardship.
Certain tax debts: Some income taxes may be discharged if they meet specific criteria, but recent or fraudulent tax debts are not.
Debts from fraud: If a court determines a debt was incurred through fraud or malicious activity, it cannot be discharged.
Court fines or penalties: Criminal restitution or fines, such as traffic tickets, are nondischargeable.
What About Secured Debts?
Secured debts, like mortgages and car loans, are tied to specific assets. Bankruptcy won’t automatically eliminate the lien on the property, but it can help:
Chapter 7 Bankruptcy: You may surrender the asset (e.g., your home or car) to eliminate the debt or work out a reaffirmation agreement to keep it.
Chapter 13 Bankruptcy: You can include these debts in your repayment plan, allowing you to catch up on payments and keep the asset.
How I Can Help You Navigate These Rules
Understanding which debts are dischargeable can be confusing, but you don’t have to figure it out alone. I’ll help you evaluate your financial situation and create a plan to address all your debts—dischargeable or not.
Take the First Step Toward Debt Relief
If you’re overwhelmed by debt, let me guide you toward a brighter financial future. Call my office in Sebring, Florida, at [insert phone number] for a free consultation. Together, we’ll explore your options, help you eliminate eligible debts, and find a solution to address the rest. Don’t wait—the path to financial freedom begins today!