Not all debts are treated equally in bankruptcy. Understanding which debts can be discharged (eliminated) and which survive is critical to deciding whether bankruptcy is right for you.
Most unsecured debts can be discharged including credit card debt, medical bills, personal loans, payday loans, old utility bills, deficiency balances, and certain older tax debts. These debts are eliminated in Chapter 7 (3-4 months) or paid partially in Chapter 13 (3-5 years).
| Debt Type | Dischargeable? | Notes |
|---|---|---|
| Credit card debt | Yes | Fully dischargeable. Recent luxury purchases over $800 within 90 days may be challenged. |
| Medical bills | Yes | Fully dischargeable. No minimum or maximum. |
| Personal loans | Yes | Including payday loans, installment loans, signature loans. |
| Old utility bills | Yes | Past-due electric, gas, water, phone bills. |
| Collection accounts | Yes | Even debts that have been sold to collection agencies. |
| Civil judgments | Usually | Most money judgments are dischargeable. Fraud judgments are not. |
| Deficiency balances | Yes | From repossessions or foreclosures. |
| Lease obligations | Yes | Early termination penalties on apartment or car leases. |
| Some older taxes | Conditional | Must meet 3-year/2-year/240-day rules. Details. |
| Debt Type | Dischargeable? | Notes |
|---|---|---|
| Student loans | Rarely | Must prove undue hardship (Brunner test in 2nd Circuit). |
| Child support | No | Domestic support obligations are never dischargeable. |
| Alimony/spousal support | No | Domestic support obligations are never dischargeable. |
| Recent taxes | No | Taxes that do not meet the 3-year/2-year/240-day rules. Details. |
| Fraud debts | No | Debts from fraud, false pretenses, or false financial statements. |
| Willful injury | No | Debts from intentional harm to another person or property. |
| DUI-related debts | No | Death or personal injury caused by intoxicated driving. |
| Government fines | No | Criminal fines, penalties, and court-ordered restitution. |
| Certain HOA fees | Partial | Post-petition HOA fees are not dischargeable if you keep the property. |
The full list of non-dischargeable debts is found in 11 U.S.C. section 523(a).
Backed by collateral - the lender can take the property if you default.
In bankruptcy, you choose to keep paying (reaffirm), surrender the collateral, or address through a Chapter 13 plan.
No collateral - the creditor's only option is to sue for a money judgment.
Most unsecured debt is eliminated in bankruptcy through the discharge.
Some unsecured debts are classified as "priority" under 11 U.S.C. section 507. These must be paid in full in Chapter 13 and survive Chapter 7 discharge:
Most unsecured debts: credit cards, medical bills, personal loans, payday loans, old utility bills, deficiency balances, and certain older taxes. Chapter 7 eliminates them in 3-4 months.
Student loans (unless undue hardship), child support, alimony, recent taxes, fraud debts, DUI injury debts, and government fines. Full list: 11 U.S.C. section 523(a).
Yes. Credit card debt is fully dischargeable. Recent luxury purchases over $800 within 90 days or cash advances over $1,100 within 70 days may be challenged but are still often discharged.
Secured debt has collateral (mortgage, car loan). Unsecured has none (credit cards, medical bills). In bankruptcy, most unsecured debt is discharged while secured debt requires you to keep paying, surrender, or restructure through a plan.
Use the free 1328(f) screener to check whether a prior discharge affects your eligibility.
Free Discharge ScreenerRelated New York Bankruptcy Resources
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