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How Unsecured Debt is Handled in a Chapter 7 Bankruptcy Petition

Unsecured debt refers to debt obligations that are not linked to a particular asset, like a house or car. Some common examples of unsecured debt include credit card debt and medical bills. For the most part, unsecured debt is dischargeable under a Chapter 7 bankruptcy petition.

Bills to pay.

There are some notable unsecured debt obligations that cannot be discharged under a Chapter 7 bankruptcy petition. For example, most petitioners are not able to discharge their child support, alimony, and student loan obligations. Student loan debt, for example, is typically only dischargeable if the petitioner can prove undue hardship to the court, such as a disability. Petitioners who file for Chapter 7 bankruptcy will also find it difficult to discharge tax debt and bills stemming from recently purchased luxury items.

Every consumer bankruptcy case is different, so it is important to speak with a bankruptcy attorney about the unique facts surrounding your financial situation. You can schedule a free bankruptcy evaluation with Cutler & Associates in Aurora by calling (847) 868-2265.

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