Types of Debt In Bankruptcy

What types of debt can be “included” in bankruptcy?

If a debt is “included” in a bankruptcy, the debt is eligible for discharge, or forgiveness. A Chapter 7 discharge is entered without any repayment of your debts. Discharge is entered in a Chapter 7 Bankruptcy several months after the case is filed. A Chapter 13 discharge is entered after a three to five year period where all or a portion of your debts are paid back without interest or penalties. Let’s take a look at the types of debt that are dischargeable in bankruptcy:

  • Credit card charges (including overdue and late fees)
  • Collection agency accounts
  • Medical bills
  • Personal loans from friends, family, and employers
  • Utility bills (past due amounts only)
  • Dishonored checks (unless based on fraud)
  • Student loans (only in rare circumstances. Instead, let’s focus on how to mange your student loans)
  • Vehicle repossession deficiency balances
  • Auto accident claims (except those that involve drunk driving)
  • Business debts
  • Money owed under lease agreements (including past due rent)
  • Civil court judgments (unless based on fraud)
  • Tax penalties and unpaid taxes past a certain number of years
  • Attorney fees (except child support and alimony awards)
  • Social security over payments
  • Veteran’s assistance loans and over payments

 Debt Relief NJ