It is important to realize that not all debts are created equal. Certain debts can be discharged in bankruptcy and others cannot.
Unsecured debt refers to any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation or failure to meet the terms for repayment. This includes:
In contrast, secured debt is debt in which the borrower pledges an asset as collateral. This may be a house or property.
Generally speaking, most debt is dischargeable in bankruptcy. That said, if one has a deficiency judgment in bankruptcy, it may be possible to discharge such debt. In addition, although student loan debt has no collateral that backs it up, it generally cannot be discharged in bankruptcy.
Liens on property are not dischargeable but may often be stripped off or redeemed for its true value (which may be less than the debt). Priority debt is generally not dischargeable (recent tax debt, child support). However, priority debt may be paid back in a three- to five-year Chapter 13 plan.
That said, bankruptcy law is nuanced, complex and varies based on circumstances. If you are burdened with debt, it is important to know your rights. We are here for you.
New Jersey Debt Relief Attorney
Because we have helped thousands of clients in more than three decades of legal work, we are prepared to help them get back on track to financial stability as efficiently and effectively as possible. We will fuse our comprehensive knowledge with a personalized and hands-on approach we have refined over three decades of practice. We are here for you.
To schedule a free initial consultation to discuss types of debt in bankruptcy with our Monmouth County bankruptcy lawyer, call toll free: 866-974-1136 or fill out our contact form. Hablamos español.
The law offices of William H. Oliver, Jr. & Associates is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.