Which debts discharged in bankruptcy?


At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Which bank should I choose?

Get personalized bank recommendations in 3 easy steps.

You can file bankruptcy for a variety of reasons, such as eliminating credit card bills, car repossessions and material supplier debts. You can even file bankruptcy on your medical bills if they’ve become more than you can handle.

Let’s go through these and the other types of debts that you can discharge in bankruptcy. 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 before filing your case may be tricky. The creditor may object to your request to eliminate the entire balance, claiming you never intended to pay for those items. I have seen clients take high-priced vacations or purchase expensive merchandise before filing bankruptcy, only to pay for the excessive use or the expensive merchandise after the filing.

Ask the adviser

To ask a question of the Bankruptcy Adviser, go to the “Ask the Experts” page and select “Bankruptcy” as the topic. Read more Bankruptcy Adviser columns and more stories about debt management.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.