The primary goal of filing for bankruptcy is to have your debts erased. Not all debts are treated the same in bankruptcy. Prior to filing it is important to know if bankruptcy will erase your debts. Consult with an experienced bankruptcy attorney to review your debts and when/how they were incurred so you can determine if bankruptcy is the right solution to your debt problem.

Types of Debt: Dischargeable & Nondischargeable

Bankruptcy classifies debts as either dischargeable or nondischargeable. Dischargeable debts are debts that can be erased in bankruptcy. Nondischargeable debts are debts that cannot be erased through bankruptcy and must be paid back.

The most common debts that are dischargeable include:

  • Credit cards
  • Medical bills
  • Personal loans
  • Utility bills
  • Certain older tax debts
  • Other types of credit or loans that were given without a collateral requirement.

The most common debts that are nondischargeable include:

  • Spousal or child support payments
  • Fines imposed from a government body
  • Debts resulting from illegal activity
  • Some tax debts, including newer tax debts
  • Student Loans

This list is not exhaustive. Due to either the type of debt you owe, or when or how it was incurred, you may have other debts that are also nondischargeable.

Types of Debt: Secured & Unsecured

Debts are either secured or unsecured. Secured debts are debts backed by collateral, including car loans and home mortgages. If you default on payments on a secured debt, the creditor can seize the collateral to help satisfy the debt. Unsecured debts are not backed by collateral or secured by anything of value, including medical bills and most credit cards. If you default on payments on an unsecured debt, the creditor cannot seize property from you without first filing a law suit against you for nonpayment of debt and getting a judgment from the court.

Unsecured debts are generally dischargeable in bankruptcy. Personal liability on secured debt is discharged in bankruptcy, but the liability (lien) remains attached to the collateral. If you intend to keep the collateral (your house, your car) a secured debt is attached to, then you must pay back the debt after bankruptcy. If you do not intend to keep the collateral, you may surrender it in bankruptcy and discharge your personal liability on any unpaid remainder of the debt.

Will Bankruptcy Help Me Get Out of Debt?

At the Law Office of Barbara B. Braziel we are committed to helping people get out of debt and gain the financial freedom they deserve. We invite you to learn more about who we are here. If you live in Savannah, GA or the surrounding areas and have questions about your debt relief options, let’s meet for a free consultation.

Reach out to us at (912) 351-9000 or contact us by filling out this simple web form.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.