What debts can be discharged?

Most unsecured debts (credit cards, medical bills, personal loans) are dischargeable. Non-dischargeable debts include student loans, recent taxes, child support, and debts from fraud.

What is the difference between secured and unsecured debt?

Secured debt is backed by collateral (mortgage, car loan). Unsecured debt has no collateral (credit cards, medical bills).

Types of Debt in Newark Bankruptcy

Understanding how different debts are treated in bankruptcy is key to making the right decision.

Dischargeable Debts

Credit card debt
Medical bills
Personal loans
Utility arrears
Old lease obligations
Deficiency balances after repossession
Some older tax debts
Civil court judgments (from contracts or negligence)

Non-Dischargeable Debts

Student loans -- Unless you prove undue hardship (details)
Recent taxes -- Taxes not meeting the 3-2-240 rule (details)
Child support and alimony -- Domestic support obligations are never dischargeable
Criminal fines and restitution
DUI-related debts
Debts from fraud, embezzlement, or willful injury
Debts not listed in your petition (if the creditor did not receive notice)

Secured vs. Unsecured

Type	Examples	Treatment
Secured	Mortgage, car loan	Must pay to keep the collateral; can surrender to discharge
Unsecured priority	Recent taxes, child support	Must be paid in full (Chapter 13)
Unsecured non-priority	Credit cards, medical bills	Discharged in Chapter 7; pay percentage in Chapter 13

Frequently Asked Questions

Can I discharge a court judgment?

Most money judgments from breach of contract or negligence are dischargeable. Judgments from fraud or willful injury are not.

What happens to co-signed debt?

Your discharge eliminates your obligation, but the co-signer remains liable. In Chapter 13, the co-debtor stay may protect them during your plan.

Open Bankruptcy Project Network

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