What Debts Can Be Eliminated?

What Debts Can Be Eliminated?

Are you considering filing for bankruptcy protection? You are not alone. The American Bankruptcy Institute (ABI) reports that around 35,000 people file for Chapter 7 bankruptcy or Chapter 13 bankruptcy in New York in the average year. You may be wondering: What debts can be eliminated through bankruptcy? The answer depends on a few key factors. Here, our New York bankruptcy lawyers provide an overview of the debts that can—and cannot—be eliminated in bankruptcy.

Background: Chapter 7 Liquidation Bankruptcy vs. Chapter 13 Reorganization Bankruptcy

As a starting point, it is important to note that there are two main types of personal bankruptcy protection: Chapter 7 and Chapter 13. A Chapter 7 bankruptcy is a liquidation bankruptcy. A successful petition results in the discharge of many (but not all) debts. A Chapter 13 bankruptcy is a reorganization bankruptcy. A successful petition results in a multi-year repayment plan that is affordable given the debtor’s financial situation.

Debts that Can Be Eliminated in Bankruptcy in New York

Many different debts can be eliminated—or substantially reduced—through a bankruptcy filing in New York. More specifically, you may be able to remove the following debts:

  • Credit card debt;
  • Medical bills and medical debt:
  • Personal loans;
  • Unsecured debts;
  • Most civil lawsuits; and
  • Other types of dischargeable debt.

Debts that Cannot Be Eliminated in Bankruptcy in New York

Not all debts can be discharged through bankruptcy. In New York, the following debts are generally considered to be non-dischargeable in bankruptcy:

  • Child support;
  • Tax debt; and
  • Federally-backed student loans.

Get Help With Debt Consolidation in Manhattan, Queens & Brooklyn

At Poltielov & Habib, LLP, we provide debt consolidation, loan modification, and personal bankruptcy legal services. If you have any questions about the debts that can be eliminated, we can help. Contact us today to set up your free, no obligation initial legal consultation.