Bankruptcy Basics: Can All My Debts Be Wiped Out?
By Brett Weiss, Maryland Bankruptcy Attorney on Feb 13, 2007 in Bankruptcy Myths, Benefits of Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Collection Issues, Credit Cards, Discharge, What Can and Cannot Be Forgiven, Foreclosure Issues, General Bankruptcy Information, Life After Bankruptcy, Maryland, Protecting Assets In Bankruptcy
Can All My Debts Be Wiped Out?
Most of your general unsecured debt—credit cards, personal loans, doctor and hospital bills, attorney’s fees, utility bills—can be wiped out. If you surrender an asset securing a loan, any loan balance can be wiped out as well. There are certain debts that cannot be discharged. Federal and state taxes incurred less than three years before the date of filing (although you may get more time to pay them back in a Chapter 13), student loans (except where you can show “undue hardship”), and domestic support obligations are the big ones.
If you’re behind on a mortgage, car payment, taxes or domestic support obligation, a Chapter 13 can give you up to five years to pay these arrearages back, usually without additional interest.
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