Which debts discharged in bankruptcy?

Justin HarelikDear Bankruptcy Adviser,
I have debts in the form of credit cards, material to suppliers, a car wreck (I was not insured and it was my fault) and a truck repo. Most of these creditors have judgments against me. I am so far underwater I cannot possibly make good on these debts. Can filing bankruptcy eliminate these debts? Thank you for your response.
-- Robert

Dear Robert,
Most of the debts you listed can be discharged in bankruptcy. Let's go through each type, plus other common debts that people seek to eliminate. An experienced bankruptcy attorney could discuss other debts you may seek to eliminate.

Debts that can usually be discharged in bankruptcy

  • Credit cards or unsecured loans.
  • Car repossessions and deficiency balances.
  • Some car accidents.
  • Material supplier debts.
  • Medical bills.
  • Lawsuits and judgments.
  • Evictions and unpaid rent.
  • Unpaid utility bills.
  • Foreclosure balances.

Credit card or unsecured loans: This is the most common type of debt eliminated in bankruptcy. Examples: department store cards, personal loans from a credit union, banks or other financial institutions, payday loans and gas cards.

Exception: Excessive credit card use in the months prior to filing your case may be problematic. The creditor may challenge your request to eliminate the entire balance, claiming you never intended to pay for those items. I have seen clients take expensive vacations or purchase high-priced merchandise prior to filing bankruptcy, only to pay for the excessive use or the expensive merchandise after the filing.

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