In a Chapter 7, almost all unsecured debts (debts not secured by personal or real property) such as medical debt, credit card debt, personal loans, some judgments, payday loans, vehicle deficiencies, mortgage deficiencies, and certain tax debt with certain exceptions such as income tax liabilities for the past 3 years.
Chapter 7 does not eliminate secured debts (home loans and automobile loans) except for liens on personal property that are redeemed for the fair market value of the collateral in the bankruptcy. It also does not eliminate student loans (it may be possible in some extreme scenarios; however, it is always nearly impossible in most cases), alimony, and child support obligations.
In a Chapter 13, all debts dischargeable in a Chapter 7, plus you get a super discharge. This means that certain debts that are non-dischargeable in Chapter 7 are dischargeable in Chapter 13. You can also modify the rights of secured creditors in Chapter 13, which means that you can strip down a lien to the value of the collateral such as a car or a house in your Chapter 13 payment plan. [See section on Chapter 13 Bankruptcy ].
Under some circumstances, you may be able to keep some credit cards if the creditor agrees. However, there are many factors to consider such as the credit card balance at the time of bankruptcy, and whether you will be able to pay the present and future credit card debt. Keep in mind that once you are discharged from bankruptcy, creditors will normally send you new credit card offers in the mail, which may be a better option.
In a Chapter 7, you cannot use them until you receive a discharge.
In a Chapter 13, you must get court permission to incur debt over $250, except in emergencies.
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