Which Debts Will Be Discharged Under Your Bankruptcy?

Just about everyone knows the negative effects of bankruptcy: bad credit, difficulty obtaining loans and renting property. But seldom discussed are the positive effects of bankruptcy, and more specifically, which debts are indeed discharged as a result of a successful bankruptcy petition. This article will explore which debts will be discharged under your bankruptcy, and which debts you will still have to repay.

Bankruptcy is very effective at wiping out all credit card debt and other unsecured debts. Under Chapter 7, all of these debts will be discharged, and the credit card companies will have no recourse. Since these are unsecured debts, the credit card companies cannot repossess any of your personal property in order to satisfy these debts. If you file for Chapter 13, however, you may have to repay a portion of your credit card debt and other unsecured debt over a three to five year period.

Another positive effect of filing for bankruptcy is that creditors will be immediately forced to stop harassing you and all collection activities will immediately cease. All actions against you, including foreclosures and vehicle repossessions, will receive a stay.

Of course, there are certain debts that bankruptcy will not discharge. Alimony and child support debts will not be discharged in your bankruptcy. Student loan debts also survive bankruptcy, and only under the most limited of circumstances can they ever be discharged. In order to have tax debts discharged, you will need to meet a number of requirements, and seldom do petitioners in fact meet them.

Likewise, you will not be able to discharge fines and penalties imposed for violating the law, and debts for personal injury or death caused by your intoxicated driving. If you forget to list a debt in your bankruptcy papers, it may not be discharged, so be very thorough when including your debts in your petition.