Will All My Unsecured Debt Be Eliminate In Bankruptcy?

: Reese Baker & Associates

  Filed under: Debt

cashWhen you are at the stage with your finances where you feel you have no choice but to go bankrupt, it may seem to you that all your debt is the same. When you file for bankruptcy your debt is categorized. Some of it will be unsecured debt. This is debt where the creditor doesn’t have a hold on it by way of property. For example, if you have medical debt this is an unsecured debt. If you have a car loan then the car may be the collateral for the loan and this is a secured debt.

Some individuals assume that once they claim bankruptcy that all of their debt will be discharged. It is highly important to use the services of a Bryan/College Station bankruptcy attorney to assist you with this form of debt relief. This way as you go through the various stages of the bankruptcy this professional can explain to you what is taking place. You may have some debt that cannot be discharged, and you need to understand this. In most cases the unsecured debt in a chapter 7 bankruptcy will be discharged and perhaps all or some of it at least in a chapter 13 bankruptcy.

In many cases it is the unsecured debt that causes a lot of people to run into serious financial difficulties. This is often credit card debt, but often includes medical debt. You also have to realize that bankruptcy will not discharge some types of debt like some tax debt, or student loans except in rare circumstances. It will not dissolve your child support and alimony obligations. However, if you can get rid of your unsecured debt then it may put you in a better financial situation so you can meet your obligations with your other debts.