What Debts Can Bankruptcy Eliminate?

Bankruptcy is an area of law that is unfortunately plagued by myths and misinformation. Some people believe bankruptcy is a cure-all, that it restores everything to perfection. Others think the opposite, that filing bankruptcy means a lifetime of ruin. The truth is that neither of these extremes is true. Before you decide what to do, make sure you talk to an attorney about what can and cannot be accomplished in a bankruptcy proceeding.

Debt Discharge Attorney In Bethlehem

I am attorney John R.K. Solt, and I can help you understand what types of debt can be dealt with via bankruptcy and which cannot. I have 40 years of experience in this area of law and have helped many Pennsylvanians regain their financial stability. My firm achieves positive results through honest, open communication with clients and through determined advocacy in court against creditors.

Treatment Of Debt Depends On The Type Of Bankruptcy Filed

The type of bankruptcy you file will largely determine which debts get eliminated and which do not. Some types of debt cannot be eliminated in any form of bankruptcy.

If you file Chapter 7 bankruptcy, many types of debt can be completely eliminated:

  • Credit card debt
  • Medical bills
  • Tax debts that are more than three years old
  • Utility bills
  • Second mortgages
  • Virtually any other unsecured debt

If instead you file Chapter 13 bankruptcy, your debts then become part of a repayment plan, which lasts between three and five years. All of the debts listed above become part of your plan, as do secured debts such as mortgages and car loans. After the payment period expires, you are considered current on secured debts and any remaining unsecured debts are eliminated.

Are There Debts That Cannot Be Discharged?

Certain debts cannot be eliminated in bankruptcy. They can, however, still be part of your repayment plan if you are filing Chapter 13. The non-dischargeable debts include:

  • Taxes less than three years old
  • Child support obligations
  • Alimony/spousal support
  • Student loans (except in cases of extreme hardship)
  • Fines from traffic tickets
  • Restitution payments from a criminal case
  • Secured debt on property you want to retain, such as a car or home

Contact An Credit Card Debt Lawyer

If you are in the Lehigh Valley and want to know more about what debts bankruptcy can eliminate, I would be happy to answer those questions for you. To schedule an appointment, call 610-601-5381 or fill out this online contact form.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.