Is all unsecured debt erased in bankruptcy?

Before filing for bankruptcy, it is important to know whether your debt is the type of debt that is erased following a bankruptcy.  There are two kinds of debt, secured debt and unsecured debt.  Secured debt is debt that is secured by collateral.  For example, your mortgage is a debt that is secured by your home.  If you default on your mortgage, your lender can initiate foreclosure proceedings to recoup payment on your debt.  Unsecured debt is debt that is not secured by any kind of collateral.  Examples of unsecured debt include credit card debt, student loans and child support payments.   

If you qualify for chapter 7 bankruptcy then, depending on what type of unsecured debt you have, most of your unsecured debt will likely be discharged after your bankruptcy.  For example, your credit card debt and personal loans is dischargeable after your bankruptcy is final.  However, some kinds of unsecured debt are not erased in bankruptcy because of public policy concerns.  Unsecured debts not dischargeable in a chapter 7 bankruptcy include student loans, child support, spousal support and taxes.  However, if you are considering filing for chapter 13 bankruptcy, then a percentage of your unsecured debt is repaid to your creditors during your approved chapter 13 repayment plan. 

Bankruptcy is a complicated legal process.  Speak with an attorney in your state to determine if your unsecured debt will be erased in a bankruptcy.