What Debts Are Wiped Out by Bankruptcy?

The Discharge: What “Wiped Out” Actually Means

When a bankruptcy case ends successfully, the court enters a discharge — a permanent federal court order that erases your legal obligation to pay the covered debts. Creditors can never again bill you, call you, sue you, or garnish your wages for a discharged debt. In a typical Florida Chapter 7, the discharge arrives about four months after filing; in Chapter 13, it comes after you complete your three-to-five-year repayment plan.

Debts Bankruptcy Wipes Out

The discharge covers most unsecured debts — debts with no collateral behind them. That includes credit card balances and late fees, medical and hospital bills, personal loans and payday loans, old utility and phone bills, past-due rent and broken leases, deficiency balances after a car repossession or foreclosure, most old civil court judgments, and business debts you personally guaranteed. For most families, these categories are the bulk of what they owe — which is why the majority of filers walk away from Chapter 7 with most of their debt gone.

Debts Bankruptcy Cannot Wipe Out

Federal law (11 U.S.C. § 523) lists debts that survive every bankruptcy. The big ones: child support and alimony (never dischargeable), most student loans (dischargeable only by proving “undue hardship” in a separate court proceeding — a difficult standard), recent income taxes (generally, income taxes less than three years old survive; older taxes can sometimes be discharged if strict timing rules are met), court fines, criminal restitution, and traffic tickets, debts from fraud or intentional injury, and injuries you caused while driving drunk. Debts you fail to list in your paperwork can also survive — one of many reasons accurate schedules matter.

Secured Debts: A Different Rule

Mortgages and car loans are secured — the lender holds a lien on the property. Bankruptcy discharges your personal obligation on the loan, but the lien survives. In practice that means you have a choice: keep the house or car and keep paying, or surrender it and walk away owing nothing — including any deficiency balance, which is wiped out. Chapter 13 adds more tools, like catching up mortgage arrears through your plan or stripping certain wholly unsecured second mortgages.

Chapter 7 vs. Chapter 13 Differences

The lists above apply to both chapters, but Chapter 13 discharges a few extra debts that Chapter 7 does not — including certain older divorce property-settlement obligations (not support) and debts for willful property damage. If a large share of your debt falls into a gray area, which chapter you choose can change what gets erased.

Wiping Out Debt in Miami-Dade County

Miami-Dade bankruptcies are filed in the U.S. Bankruptcy Court for the Southern District of Florida in downtown Miami, and the discharge rules here are the same federal rules that apply nationwide. What differs is your property: Florida’s generous homestead exemption often lets Miami-Dade homeowners wipe out unsecured debt while keeping their home. Arturo R. Alfonso P.A. has served Miami-Dade families in English and Spanish for over 35 years, and a consultation includes a debt-by-debt review of exactly what a bankruptcy would erase in your situation. If you’ve been searching for a bankruptcy attorney near me in Miami, we’ll tell you plainly which of your debts would be wiped out — and which wouldn’t — before you decide anything.

Related Questions

• What is the difference between Chapter 7 and Chapter 13?
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