On this site, and any other site about bankruptcy, you will see debt referred to as either dischargeable or nondischargeable. Sometimes, it is called secured or unsecured debt. The distinction between dischargeable and nondischargeable debt is central to how a bankruptcy can help you.
At the firm of Howard T. Duncan, Attorney at Law, we have guided individuals through the process of filing Chapter 7, Chapter 13 or Chapter 11 bankruptcy for more than 30 years. We strive to examine a client's financial situation in order to provide a detailed analysis of whether or not bankruptcy is the best solution for his or her troubles. Often, this discussion turns to secured and unsecured debt.
The easiest way to visualize the difference is this:
Nondischargeable debt normally consists of student loans, alimony or child support and some but not all income tax obligations. Also you can agree to pay secured debt in which the lender has kept some form of ability to take the asset such as a car or a house if payments are not continued. Unsecured debt has no collateral attached to it.
Typically, unsecured debt includes credit card debt, medical bills, some types of personal loans, utility bills in some situations and cellphone bills. Secured debt cannot be discharged, or eliminated, through the process of filing for bankruptcy without also giving the property back to the secured creditor. Student loans, income tax debt and child support, for the most part, are considered nondischargeable. Although, in certain circumstances, student loans and income tax debt can be discharged. It should be noted, however, that these circumstances carry strict restrictions and can better be explained to you through a consultation.
Even though most court-ordered payments are considered to be secured, it is still possible to pay past due alimony and past due taxes through a Chapter 13 repayment plan and avoid further penalty. It is important to speak with a lawyer at our Omaha, Nebraska, office to learn more about the rules and regulations surrounding dischargeable and nondischargeable debt.
If you have questions regarding how filing for bankruptcy can help your financial situation, contact Howard T. Duncan, Attorney at Law. We can be reached by phone at 402-934-4221 or online by completing the contact form on this website.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.