Unsure what type of bankruptcy you’re after (Chapter 7, etc.)? Debt forgiveness is not an option for every debt. An illustrative instance of that is taxes, ex-husband or -wife support, children’s maintenance, and student loans funded by the government are not able to be discharged during the process of claiming bankruptcy.

Which Debts Are Discharged in Bankruptcy?

After filing for bankruptcy, the purpose is to eliminate as much debt as possible to start a fresh financial growth. This causes it to be one of the notices that is issued along with the introduction of several differing types of debt as well so that it can cease to exist either at the beginning or end of the bankruptcy process. After discharge, you will stop paying the debt regarding interest as well. It is a final discharge and therefore, creditors can’t seek litigation for collection.

Credit Card Debt

The filing for a Chapter 7 bankruptcy may eliminate your credit card debt effectively & immediate Creditors involved are credit card debt mainly. This implies that Chapter 13 reorganization plan may pay some credit card debt in the process. Nonetheless, making such plan gives you the possibility to pay back all debts and individualizing your income you may even discharge the rest.

Medical Debt

Medical debt is a lined debt, which entitled the creditors to personal hold as a collateral in case of non-repayment. In fact, it can be done orally via filing of the Chapter 7 bankruptcy. Under Chapter 13 bankruptcy cases, a single-digit medical debt could be part of payment/repayment notices. At the end of the repayment period of your bankruptcy filing, all the remaining chosen debts which include medical debts will be discharged.


As these are loans that are not backed by a collateral as security and loans from friends and family or employer are all eligible to be discharged. Additionally, that loans come under conditions for discharge in both bankruptcy types, i.e. Chapter 7 and Chapter 13.

Which Debts Generally Can Be Wiped Out in Bankruptcy?

All debts will not be discharged. It will depend on what bankruptcy is filed. On the other hand, if your debt category is not covered, it might be due to the fact that Congress considers it according to certain policy factors.

Tax Debt

The several different types of taxes are the tax debts in bankruptcy which are non-income tax debts. But the situation is not quite as straightforward when the tax rate is less than the tax debt and some of the latter meets designated criteria.

Spouse/child Alimony

Money dedicated for spousal alimony and child support are not to be discharged in case of bankruptcy. The choice of this type of regulation is not your own, to be an inescapable obligation. Hence, all the unpaid bills for the food and other items, which you enjoyed during the period of the detention, will be left with you also when you are finally released.

Student Loans

In majority of occasion, individuals borrowing the student loans may not be eligible for those to be discharged. Also included are student loans provided by the university itself, loans by private lenders and those that come under federal student loans. In the first place, there are, some cases; Likewise, if you have developed an illness/become disabled such that working is impossible and produce sufficient medical evidence, the students’ loans would be excused. Moreover, you can provide the evidence that the burden of the debts goes beyond reasonable ability of the repayment and that you made all efforts to return the loans. In such circumstances you can apply for debt discharge.

Let’s Say You Filed for Bankruptcy Only to Find That It Did Not Completely Discharge All Your Debts

Anyhow bankruptcy may not be a mean to discharge all your debts but it can also be considered helpful in many cases. The mechanism of bankruptcy consists in the possibility of filing and getting a “new money” start. When a certain chapter or section of bankruptcy is followed, almost all of the existing debts either get bankruptcy plan payment or be sold through liquidation of the non-exempt assets.

The Bottom Line

It’s gravely danger to your credit rating, the bankruptcy should typically be viewed as the last option to resolve the debt. Filing for bankruptcy will assist either 150 or 200 points to your score and the situation will create a permanent record that will remain in your profile for a decade. Before opting for a bankruptcy, go through options like working with a credit counselor, or Texas Bankruptcy Lawyer & better evaluation of budgets.