The Founders of our country knew that people would sometimes be overwhelmed by debt and be unable to escape it unaided. That is why they gave us the constitutional right to discharge some of our debts and start over.
If you are considering filing for bankruptcy, however, you should know which types of debt you can discharge, and which types will stay with you even after you file. While dischargeable debt may vary depending on the type of bankruptcy you file, it can be helpful to understand generally what types of debt are considered dischargeable.
Types of debt that can be discharged
Bankruptcy will give you the opportunity to discharge all or most of several different types of unsecured debt. Discharging debt means that you are freed from the obligation to repay the debt, and creditors cannot bring further legal actions to recover that debt from you.
Dischargeable debt includes some types of debt that you voluntarily assumed, such as credit card debt, the mortgage on your house and car loans. It also includes debt that you did not voluntarily take on, such as debt for medical care or some types of back taxes.
Types of debt that cannot be discharged
Unfortunately, despite being one of the most common types of debt, student loans are not eligible for discharge. You will also not be able to discharge any restitutions, spousal support orders and other court-ordered payments that you may have.
For example, for public policy reasons, people who have a conviction for driving under the influence of alcohol and who injure someone else will not be able to discharge the restitution that they owe the victim.
Bankruptcy serves an essential purpose for those who have become buried in debt. You should not be ashamed of taking advantage of your right to declare bankruptcy if it is what you need in order to rebuild your life and start again.