What Debts Does Bankruptcy (BK) Wipe Out

Chapter 7 bankruptcy wipes out most unsecured consumer debts. You can eliminate:

• Credit card balances
• Medical bills
• Personal loans
• Utility bills
• Phone bills
• Judgments from unpaid unsecured debts
• Deficiency balances after repossession/foreclosure

Your personal liability on secured debts like car loans may be erased if you don't enter a reaffirmation agreement.

However, some debts can't be discharged through Chapter 7:

• Student loans
• Recent tax debts
• Child support
• Alimony
• Court fees and fines
• Most secured debts tied to collateral (unless you surrender the property)

Filing Chapter 7 gives you a fresh start by erasing qualifying debts in about 4 months. Big picture, Chapter 7 can help you reset your finances, but you need to know what it does and doesn't erase.

Chapter 13 bankruptcy affects debt discharge by allowing you to keep assets while repaying debts over 3-5 years. After completing payments, remaining qualifying debts are discharged, meaning you're no longer legally obligated to pay them.

Key points:
• You get a broader discharge than Chapter 7, covering some debts not eliminated in liquidation bankruptcy.
• Certain debts like recent taxes, student loans, and child support typically can't be discharged.
• The discharge process begins after the repayment period ends.
• The court issues an order releasing you from liability for discharged debts.
• Creditors are prohibited from further collection attempts on discharged debts.

While Chapter 13 offers debt relief, it has drawbacks:
• Lengthy repayment period.
• Impact on your credit.
• Risk of case dismissal if payments are missed.

We advise you to carefully weigh the pros and cons of Chapter 13 versus other options before filing. A bankruptcy attorney can help you understand if it's right for your situation. Overall, consider your specific financial situation and consult a professional to see if Chapter 13 is a suitable solution for you.

Certain types of debts are non-dischargeable in bankruptcy. You can't wipe out the following debts:

• Recent taxes (federal, state, local)
• Child support and alimony
• Most student loans
• Court-ordered restitution
• Debts from fraud or embezzlement
• Willful and malicious injury to people or property

You will still owe these debts even after filing for bankruptcy. However, there are some exceptions:

• Taxes over 3 years old might be dischargeable
• You might eliminate student loans if you prove "undue hardship"
• Creditors must object for fraud-related debts to be non-dischargeable

Additional potentially non-dischargeable debts include:

• Recent luxury purchases on credit cards
• Cash advances right before filing
• Unscheduled debts not listed in your bankruptcy petition

If you have mostly non-dischargeable debt, bankruptcy might not provide much relief. You should consider alternatives like debt relief companies or credit counseling. As a final point, it is important to work with a bankruptcy lawyer to understand your options and maximize your debt discharge.

Yes, bankruptcy can eliminate credit card and medical bills. Both types of debt are unsecured and can be discharged in Chapter 7 or Chapter 13 bankruptcy.

In Chapter 7, you can wipe out all medical and credit card debts without repayment if you qualify based on your income. There is no limit to the amount that can be eliminated.

Chapter 13 consolidates debts into a 3-5 year repayment plan. You will pay back a portion of your medical and credit card balances based on your income and expenses. The remainder is discharged when you complete the plan.

Filing for bankruptcy stops collection actions and lawsuits related to these debts. However, it will negatively impact your credit for several years. You must include all debts when filing—you cannot pick and choose.

Before filing, consider negotiating with your creditors or exploring debt consolidation options. We advise you to see bankruptcy as a last resort, but it can provide a fresh financial start if you're overwhelmed by medical bills and credit card debt.

To put it simply, bankruptcy can help you eliminate credit card and medical bills, but it's crucial to evaluate all options before proceeding.

Bankruptcy impacts secured debts like mortgages differently than unsecured debts. When you file for bankruptcy with secured debts, you have a few options:

• Keep the property by continuing payments to retain ownership.
• Surrender the property to the lender and discharge the debt.
• Redeem the property by paying its current value in a lump sum to keep it.

In Chapter 7 bankruptcy, you can discharge your personal liability for secured debts, but lien rights persist. If you stop payments, lenders can still repossess or foreclose on the property.

Chapter 13 bankruptcy allows you to restructure secured debts over 3-5 years, helping you catch up on missed payments and keep your home or vehicle.

When you file for bankruptcy, the automatic stay temporarily halts foreclosure or repossession. You need to act quickly to address secured debts and avoid losing important assets.

We recommend you consult a bankruptcy attorney to understand your specific options for handling secured debts like mortgages. They can help you make informed choices to protect your property while resolving overwhelming debt.

In short, understanding how bankruptcy impacts secured debts like mortgages can help you navigate your options, from keeping or surrendering property to restructuring your payments.

Yes, student loans can be discharged through bankruptcy, but it's challenging. You need to prove that repaying the loans causes "undue hardship." This involves an adversary proceeding, where you sue the government. The process is complex and often costly, with historically low success rates.

However, recent changes in 2022 have made it easier for borrowers to get relief. Federal and private student loans can both be discharged, but you must show that you can't maintain a minimal standard of living while repaying the loans. The Department of Justice (DOJ) and Department of Education (ED) now use a standardized process to evaluate undue hardship claims, simplifying the procedure. You need to fill out an attestation form detailing your financial situation.

To finish, if you meet the criteria, you can pursue a full or partial discharge of your student loans through bankruptcy.

If you file for bankruptcy, you might clear some tax debts, but not all. For income taxes to be dischargeable in Chapter 7 bankruptcy, the following conditions must be met:

• The tax return was due at least three years ago.
• You filed the return at least two years ago.
• The IRS assessed the tax at least 240 days ago.
• You didn't commit tax fraud or willful evasion.

Non-income taxes like payroll or property taxes generally can't be discharged. If you file for Chapter 13 bankruptcy, you can repay tax debts through a 3-5 year repayment plan.

An automatic stay stops IRS collection actions when you file. However, any tax liens filed before bankruptcy may remain on your property. You should stay current on new tax obligations during and after bankruptcy.

Consult a bankruptcy attorney to assess your specific situation and determine if your tax debts qualify for discharge. They can advise on the best approach for your circumstances. In essence, bankruptcy may provide relief, but it's crucial to understand its limitations and requirements for discharging tax debts.

You can't wipe out alimony and child support through bankruptcy. These are priority debts that remain intact regardless of whether you file Chapter 7 or Chapter 13. The law prioritizes dependents' welfare over allowing you a fresh start.

While bankruptcy won't erase these obligations, it might offer indirect help:

• Filing pauses collection efforts temporarily via automatic stay.
• In Chapter 13, you can catch up on arrears over 3-5 years.
• Discharging other debts may free up funds for support payments.

Failing to maintain current payments during bankruptcy risks case dismissal. We advise you to consult an attorney to understand how bankruptcy interacts with your specific support duties and explore options for managing these non-dischargeable debts.

You must continue court-ordered payments and remain responsible for any past-due amounts. Bankruptcy courts view these as ongoing responsibilities that you must fulfill.

To wrap up, remember: bankruptcy won't erase alimony and child support, but it can help you manage other debts, giving you more resources to meet these essential obligations.

Bankruptcy can significantly impact your recent large purchases or cash advances. Here's what you need to know:

• Timing matters: Purchases over $500 made within 90 days of your filing, or cash advances over $750 within 70 days, are presumed fraudulent.

• Luxury vs. necessity: Courts distinguish between essential expenses and non-essential "luxury" items. Necessary purchases are more likely to be discharged.

• Creditor challenges: Creditors may object to discharging debts from recent large purchases or advances, claiming fraud.

• Presumption of fraud: The law assumes fraudulent intent for certain recent transactions, making them harder to discharge.

• Burden of proof: For purchases outside the presumption period, creditors must prove you never intended to pay.

• Consequences: Non-dischargeable debts remain your responsibility after bankruptcy.

• Best practice: Avoid large purchases or cash advances before filing. If necessary, document their essential nature.

We advise you to consult a bankruptcy attorney to understand how your specific purchases might be viewed in your case.

On the whole, avoid recent large purchases or cash advances before filing for bankruptcy to minimize complications.

After a bankruptcy discharge, certain debts remain. You are still responsible for:

• Child support and alimony.
• Most student loans.
• Recent tax debts (less than 3 years old).
• Fines and penalties for breaking the law.
• Debts from fraud or false pretenses.

Secured debts like mortgages and car loans may persist if you want to keep the property. Creditors can still enforce liens on secured assets.

Chapter 7 typically discharges unsecured debts like credit cards and medical bills. Chapter 13 may discharge some additional debts after you complete the repayment plan.

Some debts are dischargeable only in specific circumstances. You need to prove undue hardship for student loans. Older tax debts may be eliminated if they meet certain criteria.

Discharge prevents creditors from collecting, but it does not erase the debt entirely. You’re no longer legally obligated to pay discharged debts.

To handle remaining debts post-bankruptcy:

• Prioritize non-dischargeable debts in your budget.
• Consider negotiating with creditors on secured debts.
• Explore income-based repayment for student loans.
• Seek legal advice for complex situations.

Bottom line, focus on managing the debts that remain and prioritize rebuilding your finances for a fresh start.

Bankruptcy can clear many collection accounts and lawsuits, but not all. Here's what you need to know:

• Chapter 7 bankruptcy discharges most unsecured debts, including credit card balances, medical bills, and personal loans.

• Filing bankruptcy triggers an automatic stay, halting ongoing collections and pending lawsuits.

• For unresolved legal actions, bankruptcy can prevent judgments by discharging the underlying debt.

• Even if a judgment exists, bankruptcy may still eliminate liability for qualifying debts.

• Some debts remain nondischargeable: recent taxes, student loans, child support, alimony, and judgments related to fraud or willful injuries.

• Secured debts like mortgages require special handling. Liens may persist unless addressed separately.

• Timing matters - filing before a lawsuit concludes offers more protection.

You should consult a bankruptcy attorney to determine eligibility and develop an optimal strategy for your specific situation. In a nutshell, understanding which debts bankruptcy can discharge and the timing of your filing is crucial for your financial relief.

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