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Will Bankruptcy Knock Out All Your Unsecured Debt?

Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I get rid of student loans by declaring bankruptcy?”


Those considering filing for bankruptcy protection often feel led to do so after being inundated with calls by credit card companies, medical bill collectors and others coming after your unsecured debts. A common question is whether these unsecured debts can actually be wiped out by filing for bankruptcy. To find out more, keep reading.


Boxing Glove Charlotte Bankruptcy Lawyer North Carolina Debt AttorneyWhat is unsecured debt?


First things first, it is important to understand exactly what unsecured debt is (and what it is not). At it’s most basic level, unsecured debts are those that are not tied to any physical property, meaning they are not secured by some tangible object. Secured debts include things like mortgages or car payments, which are tied directly to another object that can be taken by lender in the event that payments fall behind.


Unsecured loans include things like credit card debt, store cards, gas cards and medical bills. These debts are entered into without collateral and lenders have no property that they can seize should payments fall behind schedule. Other examples include things like student loans, child support arrearages and alimony.


Does Chapter 7 bankruptcy wipe out unsecured debts?


The short answer is yes; a Chapter 7 bankruptcy can typically be used to wipe out a person’s unsecured debts. Assuming a judge approves the discharge of your Chapter 7, your credit card debt, medical bills and other unsecured debts can be wiped out, freeing you from the burden of seemingly endless aggressive debt collectors.


Are there any exceptions to the rule?


As we mentioned above, unsecured debts include those things that are not attached to property or other collateral. However, some unsecured debts cannot be cleared in a Chapter 7 bankruptcy. These include debts that are categorized as non-dischargeable, meaning they cannot be wiped out. Non-dischargeable debts include student loans, child support, alimony, recent tax debts and any debt that was fraudulently entered into. These debts will not be wiped out in the event of a Chapter 7 (or any other type of bankruptcy) and will have to eventually be paid or settled.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828 or find more resources here. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.



About The Author: 

Bryan 1  Bryan Stone is a Partner with Arnold & Smith, PLLC where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord tenant issues.  Originally from Macon Georgia, Mr. Stone attended the University of Georgia for a BBA in Banking and Finance and went on to Wake Forest to earn his law degree.  After law school Mr. Stone relocated to Charlotte where he has become quite involved in many local organizations.  He is currently the Chair of “Bravo!” the young professionals organization of Opera Carolina, he also founded the UGA Alumni Association of Charlotte.  In his spare time he enjoys perfecting his BBQ skills for the annual “Q-City BBQ Championships” and playing softball with the Mecklenburg County Bar Softball League.




“Which debts can be discharged in bankruptcy?,” by Justin Harelik, published at Bankrate.com.



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