How do you know what debts are discharged in bankruptcy?

The discharge order sent by the Clerk's Office will contain a general statement about the categories of debts that are discharged . The individual debts that are discharged will not be listed on the discharge order.

Does Chapter 13 wipe out all debt?

Whether it's a Chapter 13 or 7 or 11, no bankruptcy filing eliminates all debts . Child support and alimony payments aren't dischargeable, nor are student loans and most taxes. But bankruptcy can eliminate many other debts, though it will likely make it harder for you to borrow in the future.

Can you exclude certain debt from bankruptcies?

Chapter 13 gives bankruptcy filers the option of excluding certain debts from the repayment plan and maintaining the regular payment schedule on them . Debtors often use this process, known as "reaffirming" the debt, to keep homes or other financed assets while fulfilling a bankruptcy payment plan.

What is the average credit score after Chapter 13 discharge?

The truth is that bankruptcy can definitely tank people's credit scores. But in most cases, these people already have a bad credit score because of how much debt they have. In fact, the average credit score after a bankruptcy discharge can vary between 400 and 530 .

What claims are discharged in bankruptcy?

With exceptions designated for each chapter of the federal bankruptcy code, the majority of consumer debts are dischargeable through bankruptcy, including: Unpaid balances on credit card accounts, personal loans and most other unsecured debt . Medical bills . Loans from family or friends .

What is the order of debt in bankruptcy?

In general, secured creditors have the highest priority followed by priority unsecured creditors . The remaining creditors are often paid prior to equity shareholders.

How do you prove debts in bankruptcy?

A Proof of Debt (POD) is a form completed by a creditor which details how much the creditor is owed . Creditors can be invited to lodge a POD in a bankrupt estate should the trustee expect a dividend to be paid. A POD includes supporting information to prove the debt is owed.

Are unlisted debts discharged in Chapter 7?

Asset and No-Asset Cases in Chapter 7 When money is available for creditors in bankruptcy, the matter is considered an asset case. Any debt you fail to list in an asset case won't be discharged .

Check which debts bankruptcy covers (2024)

Going bankrupt means you aren’t liable for most of your debts and you don't have to pay them.

Bankruptcy doesn't cover all debts so it's important to make sure you know whether any of your debts won't be covered and put plans in place to deal with them.

You might need to:

keep paying some debts while you’re bankrupt
stop paying some debts, but start paying them again when your bankruptcy ends

You can’t usually include a debt in your bankruptcy if it started after you went bankrupt. If you forget a debt that started before you went bankrupt, you can usually include it in your bankruptcy.

The person who deals with your debts after you go bankrupt is called the ‘official receiver’.

Check what to pay while you’re bankrupt

You still have to pay:

student loans
maintenance payments and child support payments, including any lump sum orders and costs from family proceedings, although you may be able to ask the court to order that you don't have to pay this debt
magistrates court fines
any payments a court has ordered you to make under a confiscation order, for example, for drug trafficking
See Also
Can You Buy a House After Bankruptcy? | Bankrate Getting a Mortgage After Bankruptcy | LendingTree How many bankruptcies are denied in the UK?Applying to become bankrupt
debts you owe because of the personal injury or death of another person, although you might be able to ask the court to order that you don't have to pay this debt

If you have a mortgage or debt secured on your home

You’ll need to keep paying your mortgage and any other debts secured on your home - for example, debts secured with a charging order. If you fall behind with the payments, bankruptcy won't stop your mortgage lender from taking steps to repossess your home.

If you have an income payment agreement (IPA) or income payment order (IPO), tell the official receiver you need to keep paying a secured debt. Ask them if you can pay less under the IPA or IPO so you can keep paying the secured debt as well.

If your home is repossessed and sold, but doesn't raise enough money to pay off your outstanding mortgage or any other debt secured on it, the remaining debt will no longer be secured. This means you'll be released from it at the end of your bankruptcy. The remaining debt is called 'mortgage shortfall'.

You'll also be released from a mortgage shortfall if your home is sold after your bankruptcy has ended.

If you have rent arrears

If you have rent arrears for your home, they'll be included in a bankruptcy order but your landlord could still take action to evict you. It’s important that you make a plan to pay your rent arrears during or after bankruptcy if you want to keep your tenancy.

If you have an income payment agreement (IPA) or income payment order (IPO), tell the official receiver you have rent arrears. Ask them if you can pay less under the IPA or IPO so you can keep paying the rent arrears as well.

If you have something on hire purchase

If you have an income payment agreement (IPA) or income payment order (IPO), contact the official receiver. They’ll tell you if you can keep making the hire purchase payments.

If you don’t have an IPA or IPO and you want to keep an essential item like household goods or a low value car, you’ll need to make an arrangement with the lender to keep paying for them. The bankruptcy won’t stop the lender from taking action to get the goods back if you stop paying.

Some hire purchase agreements say the lender can take the goods back if you go bankrupt, even if you keep making the payments. If your lender decides to do this, tell them you can still make the payments and ask them to let you keep the agreement. If they don’t agree, they might let a family member or friend make the payments for you.

If the goods have been repossessed already then any debt outstanding will be covered by the bankruptcy.

If you owe money to people or companies in the EU

Debts to people or companies in the EU might not be covered by bankruptcy.

Check what to pay after your bankruptcy ends

Some debts are paused while you’re bankrupt, but you have to start paying them again when your bankruptcy ends. This is called being ‘liable’ for the debt.

If you’re liable for a debt, you have to pay it if the lender asks you to.

If you have a benefit overpayment or social fund loan

If the Department for Work and Pensions (DWP) are taking money from your benefits to pay back an overpayment or social fund loan, they should stop taking the money while you’re bankrupt.

If they’re taking money for a social fund loan or an overpayment because of fraud, they’ll start taking the money again when your bankruptcy ends.

If the overpayment wasn’t because of fraud, you don’t have to pay it back after your bankruptcy ends.

If you gave the wrong information to get credit

You might have given a lender the wrong information if you told them something that wasn’t true, or if you didn’t tell them something they asked you about.

If you gave a lender the wrong information, the official receiver might decide you took out the debt by fraud.

The official receiver has to take your circ*mstances into account when they decide if it’s fraud. For example, they have to take into account if the lender told you to say you were earning more than you actually were, so you could get the loan.

If you took out any of your debts by fraud, you have to start paying them again after your bankruptcy ends.

If you have joint debts or a guarantor

If you owe personal debts jointly with someone else, you can include these in your bankruptcy. However, the creditor would then be able to chase the other person for the whole of the amount that is owed. They can do this whether the person is working or not.

You and the other person can each apply for bankruptcy individually, which would cover the joint debt. You will each need to pay a fee separately. You can't jointly apply for bankruptcy.

If you have joint business debts

If you have business debts that were taken out in a partnership, you can make a joint application for bankruptcy as long as all the partners agree. If you're thinking about doing this, you should take specialist advice.

You can:

If you have a guarantor debt

If someone is a guarantor for a loan you’ve taken out, it will be included in your bankruptcy but the other person will still have to pay the debt.

If you are the guarantor and the other person fails to pay, it will be included in your bankruptcy and the creditor won’t be able to chase you for it - even after your bankruptcy ends.

Adding a debt after you go bankrupt

You can add a debt to your bankruptcy if you:

took it out before you went bankrupt
are told to pay it after you’ve gone bankrupt, but it’s because of something that happened before

For example, if you’re told to pay court costs or a benefit overpayment after you’ve gone bankrupt, you can add it to your bankruptcy if the court case or overpayment happened before you went bankrupt.

If you add a debt to your bankruptcy, it’s treated the same as the debts you included before.