Debts Discharged in Bankruptcy: Common Types

When individuals have discharged bankruptcy debts, it typically means that the U.S. Bankruptcy Courts have cancelled or wiped out the debts. Personal bankruptcy is a legal process which allows people to pay off debts or eliminate them through one for two bankruptcy chapters. For instance, in chapter 7 bankruptcy is for individuals with a lot of unsecured debt and little to no income. This means that your debts under chapter 7 are wiped out. The second option is chapter 13 which is for people who have stable income secured and unsecured debts. Thus, if you choose this bankruptcy option, than you’ll have to pay your creditors in a three to five year period.

Common Types of Discharge Bankruptcy Debts Include Unsecured Debts

Unsecured debt is amount credit or money extended to people based on their promise to make payments. Thus, there’s no collateral at risk if there’s a default or nonpayment. Typically, types of unsecured debts are considered discharged or cancelled in personal bankruptcy. These debts include—but are not limited to credit card debts, payday loans and personal loans. Medical debts are also included. Another example of a common type of discharged bankruptcy debt is deficiencies. Let’s say, your car was repossessed or your house was foreclosed on, but you still owe a large amount of money. That’s considered a deficiency. Thus, the remaining balance can be cancelled or discharged.  

Obtain Legal Help about Debts that are and are not Dischargeable in Bankruptcy

There are common types of debts not discharged in bankruptcy. For instance, back child support is not eliminated in bankruptcy. Thus, it’s important for anyone interested in having their debts discharged consult a lawyer. The bankruptcy lawyer will explain the process and what debts must be paid.