Part of the bankruptcy process is identifying the debtor’s debts and determining which of those debts can be discharged (eliminated) through bankruptcy. At the Law Offices of Robert M. Geller, P.A., our attorneys advise and counsel clients about the different types of debt, evaluate their financial situation to determine what types of debt they have accumulated, and identify the most appropriate debt relief option based upon the facts of their case and their objectives.
Types of Debt: Secured vs. Unsecured Debt
Secured debt is any type of debt that is secured by some type of collateral, such as a car loan that is secured by the vehicle or a mortgage that is secured by the home. Most secured debts are dischargeable, unless they were obtained by fraud or misrepresentation. However, it is necessary to maintain payments for the secured property if you intend to keep the property after filing for bankruptcy. If you are willing to surrender the secured property – the vehicle, television, home appliance, or other collateral — you may not be required to repay the amount that was borrowed to purchase such property.
Most other debts are considered unsecured debt. Chapter 7 bankruptcy provides for the discharge of most types of unsecured debt. Once unsecured debt is discharged in bankruptcy, you are no longer obligated to repay the debt and the creditor can no longer attempt to collect such debt from you.
What Debts Can I Get Rid Of?
Unsecured debts that usually can be discharged in a Chapter 7 bankruptcy may include:
- Credit card bills
- Medical bills
- Debts that have resulted from an auto accident claim (however, judgment entered against you related to drunk driving accidents cannot be discharged)
- Unsecured personal loans/signature loans
- Unsecured credit lines
- Payday advances/payday loans
- Debts related to repossession of vehicles
- Debts owed to landlords or prior landlords
- Certain legal fees
- Past due utilities, such as outstanding cell phone bills (however, if you intend to continue service with the company, you may be required to pay additional security deposits)
- Bank overdraft fees to banks which you no longer have an account with
- Certain income taxes
What Debts Will I Still Have to Pay?
Nondischargeable debts are debts that cannot be eliminated in bankruptcy. Even after the final discharge, you will still be responsible for repaying any nondischargeable debts. Examples of debt which may not be dischargeable include:
- Debt incurred as result of fraud or misrepresentation to creditor
- Debts not listed/scheduled in the bankruptcy petition
- Child support or alimony (however, obligations to former spouse for the distribution of property may be dischargeable in a Chapter 13 bankruptcy)
- Fines or penalties owed to governmental unit (such as parking ticket fines)
- Certain income taxes depending on if, or when, the return was filed
- Most student loans (unless it can be demonstrated that the obligation to repay the debt would impose an undue hardship, or unless the loan is not funded in whole or part by a government unit or nonprofit institution)
- Restitution for criminal offenses
- Condominium assessments or dues incurred after the filing of bankruptcy petition
While nondischargeable debts cannot be eliminated through the bankruptcy process, these debts can be consolidated into a debtor’s repayment plan under a Chapter 13 bankruptcy. Therefore, a Chapter 13 bankruptcy may be a more advantageous bankruptcy option for people with a significant amount of nondischargeable debt.
Our Tampa bankruptcy lawyers provide clients with the individualized counsel necessary to make important decisions, such as whether bankruptcy is an appropriate option, under which Chapter they should file given their financial circumstances, whether they should keep or surrender their home or other assets, and other critical concerns of clients. We also educate clients of important steps they can take to re-establish their credit after filing for bankruptcy.
Contact a Tampa Bankruptcy Lawyer
To learn more about the types of debt that can be eliminated through bankruptcy, contact our Tampa, Florida, law firm. Call us at 813-254-5696 to schedule a free initial consultation. Attorney Robert M. Geller is a certified specialist in Consumer Bankruptcy Law by the American Board of Certification *.
Visit our bankruptcy information center to learn more.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
* Accredited by The Florida Bar to certify lawyers in the specialty area(s) of consumer bankruptcy law.