The Difference Between Dischargeable and Nondischargeable Debt

When exploring bankruptcy as an option for dealing with a financial situation, it is important to know what types of debts can be discharged in bankruptcy and what types of exemptions there are that may allow you to keep homes and property. A knowledgeable bankruptcy attorney can review your case and advise you of how the debts may be handled.

At the law firm of Babut Law Offices, PLLC, we focus our attention on handling all types of bankruptcy and debt issues for our Michigan clients. Contact a bankruptcy lawyer at our office today to schedule a consultation to discuss your bankruptcy and debt options.

What Is Dischargeable?

In most cases, a type of debt called unsecured debt can be discharged in bankruptcy. Debts that are not secured with collateral are called unsecured. Bankruptcy allows for the discharge of most types of unsecured debt. Once unsecured debt is discharged in Chapter 7 or as part of a Chapter 13 bankruptcy, collection agencies and creditors may no longer contact you regarding the debt, as you legally do not owe the money.

Secured D ebt

When a debt is secured by any type of collateral, such as a car loan that is guaranteed by the vehicle or a mortgage that is guaranteed by the home, it is considered secured debt. In some cases, secured debt may be dischargeable in bankruptcy. However, in most cases, you must give up the collateral if you wish to have the debt discharged. Keeping the property means continuing to make payments. Payments may be modified and made more affordable in a Chapter 13 repayment plan.

What Types of Debts Are Dischargeable?

A wide variety of unsecured debts may be discharged in bankruptcy, such as:

  • Medical bills
  • Credit card bills
  • Debts associated with repossessed vehicles
  • Debts owed to landlords or prior landlords
  • Past-due utilities
  • Payday loans
  • Unsecured credit lines
  • Unsecured personal loans

There are debts that may not be discharged, such as child support, spousal support (alimony), student loans and most types of taxes.

Contact Our Bankruptcy Attorneys Today

To learn more about dischargeable and nondischargeable debts, as well as secured and unsecured debt, please get in touch with our legal team at the law firm of Babut Law Offices, PLLC. Contact us by calling 800-671-8068 or 734-485-7000 or by sending an email.

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