Q: Will filing bankruptcy wipe out all of my debts?

A: Chapter-7 bankruptcy "wipes out" most, but not all, debts. Chapter-13 bankruptcy does not "wipe out" any debts at all, but instead, forces you to repay them to the best of your ability under a three- or five-year plan, at the end of which, the remaining balance on your qualifying debts are discharged ("wiped out").

What debts are never dischargeable under bankruptcy? The list includes, but is not necessary limited to, the following:

1. Back taxes owed to the IRS that are less than three years old

2. Student loans

3. Child support and alimony

4. Money owed a spouse due to divorce

5. Court-imposed fines

6. Loans owed to a pension plan

7. Money owed to a plaintiff who was injured or killed in a drunk-driving accident

It's also important to note that secured debts -- i.e. mortgages, car loans, etc. -- are not able to be "wiped out" unless the property is also forfeited. In other words, the only way bankruptcy can help you get out of your house payment is if you also get out of your house.

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Please Note: Unsecured debts are debts such as credit cards, personal loans, lines of credit, store cards, medical bills, and utility bills that are not secured by collateral. Mortgages and car loans are NOT considered unsecured debt.
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