Bankruptcy: What Debts Can be Forgiven?

July 14, 2022

What debts can be forgiven in a bankruptcy? General Unsecured Creditors, and Secured Debts where you are surrendering the property.

General Unsecured Creditors:  The most typical types of General Unsecured Debts that are forgiven are:

Below are a list of unsecured debts that are not eligible for discharge:

Secured Debts where you are surrendering the property: So for example let’s say you have a secured home loan, but you owe more on it than it is worth. In a Bankruptcy you have the option to surrender that property, and have that debt be forgiven. This also goes for any vehicle loan, and any loan where there is a lien on a specific piece of property.

Now there is an exception to this rule. You cannot have any debt forgiven that was the result of fraud. The most typical example of this is when you lied on your credit application, or where you had no intentions to ever pay back a loan, or perform the service.

Have a question on what can and cannot be forgiven in a Bankruptcy? Call us at 616-920-0555 or use the Contact Form below.