Understanding Dischargeable and Non-Dischargeable Debts
When considering bankruptcy as an option for dealing with overwhelming debt, it is important to understand which types of debts can be discharged in bankruptcy. You should also understand what types of exemptions there are that may allow you to keep your home and other property.
At the law firm of William C Babut PC, we focus our attention on handling all types of bankruptcy and debt issues for our Michigan clients. We can review your case and advise you of how your debts may be handled. Call a bankruptcy lawyer at (734) 485-7000 to schedule a consultation to discuss your bankruptcy and debt options.
What Debts are 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.
What is a Secured Debt?
Secured debt is debt that is secured by any type of collateral. Two examples of this are a mortgage that is guaranteed by the home, or a car loan that is guaranteed by the car.
While there are circumstances in which you may be able to discharge secured debt in bankruptcy, 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.
Addressing Unsecured Debts
A wide variety of unsecured debts may be dischargeable in bankruptcy, including:
- Medical expenses
- Debts associated with repossessed vehicles
- Debts owed to landlords
- Credit card bills
- Past-due utilities
- Payday loans
- Unsecured credit lines
- Unsecured personal loans
Additionally, some debts may not be discharged. Examples of these types of debts include child support, spousal support (alimony), student loans and in many cases, taxes.
Contact our Attorneys for Qualified Representation
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 William C Babut PC. Contact us by calling (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.