Credit card debt is usually dischargeable. However, there are exceptions such as taking out large cash advances within 90 days or less of filing for bankruptcy. In addition charging high amounts of purchases on your credit card shortly before filing are unallowable and will not be dischargeable. Certain tax obligations are dischargeable but must meet specific criteria.
Secured debts can be dischargeable such as a mortgage or car loan depending upon whether or not you want to keep or surrender the property. There are some tools to help you manage your secured debt if you file for bankruptcy. For example, if you have a second mortgage or a home equity loan that can be “stripped” or eliminated if there is no longer equity in your home.
WHAT DEBTS ARE NOT DISCHARGEABLE IN A CHAPTER 7?
- Spousal support/alimony
- Child support
- Student loans unless extreme hardship can be proven
- DUI accident injury or death judgments
- Debts for willful and malicious injuries to a person or property.
- Fines levied against you by the government
- Debts incurred by money, property or services obtained by fraudulent actions.
- Homeowner association fees incurred after filing the petition while you are in possession of the property. Pre-petition homeowners association fees are dischargeable.
- Federal tax liens in most circumstances
- Student loans.