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The ultimate goal of filing bankruptcy is to discharge your debts. A discharge of debt means that the debt is no longer owed. The creditor cannot pursue any action to attempt to collect debt from you. Most, but not all, debts are dischargeable.
Generally, debts that are unsecured are dischargeable. Unsecured debts include:
- Credit cards
- Medical bills
- Unpaid cell phone charges
- Related charges
One major exception is a student loan, which is not dischargeable unless you can show it creates an unreasonable burden. An attorney can help you determine if your circumstances match this criterion.
What Debts Are Not Dischargeable?
Secured debts usually cannot be discharged. Examples of secured debts include mortgage and car loans. If you are keeping your house or car, you must continue to pay the loan on that property. On the other hand, if you are surrendering the property, then the debt will eventually be considered an unsecured debt and will be discharged.
In some situations, a second mortgage may be considered unsecured due to the value of the property and the balance owed on the first mortgage. If filing a Chapter 13 Bankruptcy, the second mortgage can be discharged after completion of the bankruptcy.
Another class of debts that is often not dischargeable is tax liabilities. Whether or not a tax debt will be dischargeable depends on several factors, including:
- The type of tax owed
- The year in which it occurred
- Whether or not a tax return was filed
- The date the tax return was filed
If you need to file for bankruptcy, you want to get all possible benefits out of that bankruptcy. This includes ensuring all debts that can be discharged are, in fact, discharged at the end of your case. It also means that you should consult with an attorney who is experienced in handling bankruptcy cases.
Contact A Bankruptcy Attorney For A Free Consultation
Our staff at , has the experience and dedication needed to properly handle your case. With our office conveniently located in Franklin, we are readily available to assist you.
Schedule a free initial consultation at or through our online contact form.
Law Offices of Ira C. Yellin, LLC, is a debt relief agency as defined by the Bankruptcy Code, 11 USC § 101(12A).