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Which debts can bankruptcy wipe out?

If you find yourself among the many Iowans who feel they are drowning in overwhelming debt, first, know that you are not alone. Second, recognize that it is not at all uncommon to rack up a considerable amount of debt, and that it does not indicate that you are a failure in any way, shape or form.

Regardless of if your debt is the result of medical bills, credit card bills or what have you, you may find yourself considering bankruptcy as a method of getting back on top of your finances. Should you decide to take this route, it is important to understand the types of debts filing for bankruptcy can eliminate. Per Bankrate.com, in most cases, your bankruptcy filing can eliminate:

  • Medical expenditures
  • Credit cards and unsecured loans
  • Lawsuits and judgments
  • Evictions
  • Foreclosure-related expenditures
  • Car repossessions

Your bankruptcy filing may, too, may eliminate unpaid rent or utility bills, and in some cases, it can even cover expenses relating to car accidents and associated expenditures.

Exceptions

Every bankruptcy case is different, however, so what one person can eliminate may prove different than the next person. While many people file for bankruptcy to eliminate credit card debt, whether filing for bankruptcy will erase your own credit card debt might depend on your spending habits. For example, it might look bad if you spend more than is typical just before filing for bankruptcy.  Such an action may make it look as if you spent the money with the notion that you were going to file for bankruptcy soon, and you would therefore not have to ever actually pay it. If there is evidence of excessive spending leading up to your filing, you may find that creditors are unwilling to discharge certain expenditures.

While this information about debts bankruptcy can eliminate seeks to inform you, every case is different, so please do not consider this a replacement for legal guidance. 

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