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Bankruptcy Q & A: Will Bankruptcy Eliminate All My Debt?

Bridges, Jillisky, Streng, Weller & Gullifer, LLC

Bankruptcy may be a term many people are familiar with, but the legal process, the procedures involved, and the laws can be unfamiliar and uncharted territory for most. As a result, there is a great deal of misinformation and myths about bankruptcy and how it can impact your finances and your future.

At Bridges, Jillisky, Weller & Gullifer, LLC, our bankruptcy attorneys have helped many good men and women throughout Union County and the state of Ohio after they had fallen on tough financial times. Over the years, we have heard it all when it comes to myths about bankruptcy, and we always make it a point to provide our clients with the right information, as listening to a myth or misconception can seriously and negatively impact your case.

One of the most common questions we receive from clients is whether bankruptcy will eliminate all of their debts. Others may know that bankruptcy doesn’t eliminate everything, but are still unsure of exactly what type of debts they may still be on the hook for.

The fact of the matter is that bankruptcy does not eliminate all forms of debt. Both Chapter 7 and Chapter 13 bankruptcy do provide the opportunity for debtors to eliminate only certain types of debt – referred to as dischargeable debt. These debts commonly include, among others:

  • Credit card debt and fees
  • Collection agency debt
  • Medical bills
  • Personal loans
  • Utility bills

At the end of a bankruptcy case, depending on your unique circumstances and the Chapter under which you file, these debts will be wiped out by the bankruptcy discharge. Once discharged, you will not be legally obligated to make any payments toward these debts. It is vital to note that just because debts can be discharged, it does not mean that you should incur more, especially excessively and intentionally. By racking up more debt, for example credit card debt, with the intention of having it discharged at the end of your bankruptcy, you risk criminal allegations for fraud. Play it smart, and use bankruptcy as it was intended – to provide more opportunities for your future.

For many people, discharges are essential to providing the clear path for their financial future, one that will not be burdened by pre-exiting debt. However, it is important to remember that there are certain types of debt that cannot be wiped out through a discharge at the end of a bankruptcy. These debts are referred to as non-dischargeable debts, and they commonly include:

  • Student loan debt (with some rare exceptions)
  • Fines or restitution from criminal cases
  • Child support and spousal support
  • Certain tax debts

When clients come to our firm in need of help, we take all the time needed to fully explore their situation and available options, and discuss the types of debt they may be likely to discharge, as well as any debts they may continue to be liable for even after bankruptcy. Educating our clients about the process is important, as is handling all legal work on their behalf. Ultimately, our goal is help the men and women who come to us secure the best possible resolution so that they can have a brighter financial future.

If you are currently struggling with debt and have questions about bankruptcy, call our Union County lawyers at (937) 403-9033 for a free and confidential consultation.