Types of Debt in Newark Bankruptcy

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

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.

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

TypeExamplesTreatment
SecuredMortgage, car loanMust pay to keep the collateral; can surrender to discharge
Unsecured priorityRecent taxes, child supportMust be paid in full (Chapter 13)
Unsecured non-priorityCredit cards, medical billsDischarged 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

OBP Home 1328(f) Screener Ch. 7 vs 13 Automatic Stay 341 Meeting Means Test Cost Guide Dismissed? File Again? How to File

Related Newark Bankruptcy Resources

You May Also Find Helpful