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What kinds of debt can I discharge through bankruptcy?

On Behalf of | Oct 2, 2023 | Bankruptcy |

Many people see consumer bankruptcy as a cure-all for their debt problems. While it’s true that you can eliminate or greatly reduce many common kinds of debt through Chapter 7 and Chapter 13 bankruptcy, some debts are not eligible. You will almost certainly have to find another way to deal with those debts.

Specifically, Chapter 7 bankruptcy will not discharge the following debts (with very narrow exceptions):

  • Student loans
  • Unpaid child support or a judgment related to support
  • Debts acquired through false pretenses or fraud

Technically, a bankruptcy court can discharge student loans, but only if the debtor can prove that paying them off would pose an undue hardship. The standard is high. Essentially, you must show that you cannot earn a high enough income to pay your student loans and also afford basic necessities like food and shelter. An example of a successful undue hardship claim could be that you became severely disabled after graduating college and cannot work.

What you can discharge

For many people, student loans do present a financial strain, but not enough to get them discharged. Fortunately, Chapter 7 bankruptcy allows the discharge of several other debts, including:

  • Credit card debt
  • Secured loans, such as an auto loan
  • Tax debts in certain cases
  • Mortgage debt if you are willing to give up your home
  • Medical debt

In addition, Chapter 13 bankruptcy lets you reorganize most debts, if that is the better option for you. Everyone with debt problems has their own particular needs. A debt relief strategy that works for one household in Hattiesburg isn’t necessarily right for another. Legal advice from an experienced bankruptcy attorney can help you find the right path to financial stability.