- Dischargeable Debts Dischargeable debts are debts that you are no longer liable for personally. The debt ends and creditors may not make any future collection attempts. The types of debt that are dischargeable differ between Chapter 7 and Chapter 13. Bankruptcy cannot discharge some debts: criminal debts, child support, alimony, most taxes, and student loans.
- Reaffirmation of Debt If you want to keep something such as your car or home during a Chapter 7 bankruptcy proceeding, you will need to sign that you will repay that debt, that it will not be discharged.
- Wage Earners Bankruptcy (Chapter 13 Bankruptcy) Chapter 13 bankruptcy proceedings are called a “wage earners bankruptcy.” This is because most debts aren’t discharged; they are reorganized in a three to five year repayment plan. You must have sufficient income (i.e. wages) to qualify for a Chapter 13 bankruptcy.
- Chapter 11 Bankruptcy If you want your business to keep functioning, but need new contract terms in order to succeed, Chapter 11 bankruptcy provides just that. Often assets are recovered, debts are either eliminated or reduced, and the terms of contracts are renegotiated. This reorganization allows the business to continue to operate.
- Exemptions Bankruptcy law recognizes that you need certain assets, even upon filing bankruptcy, to keep functioning and take care of your family. Exemptions or “exempt assets” are those that can’t be taken from you during bankruptcy.
- Unsecured Debt Unsecured debt is debt that isn’t attached to collateral such as credit card debts. Conversely, “secured” debt is collateralized debt such as a car loan is secured by the car and a mortgage is secured by the home.