Debts

Learn about the different kinds of debt and how they’re handled in a bankruptcy case. (Hint: Most of them are wiped out by the bankruptcy discharge.)

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Debts

Almost all types of consumer debt can be eliminated by filing bankruptcy. But, as with everything in life, there are some exceptions. If you need debt relief, learn how Chapter 7 bankruptcy can give you a fresh start.

This page is your home base for learning about how different types of debt are treated in bankruptcy.

Unsecured Debt: What It Is and What Happens if You Don't Repay It?

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated August 21, 2025

Unsecured debt is money you borrow without pledging property as collateral, like credit cards, personal loans, and medical bills. Because the debt is not tied to specific property, lenders can’t automatically take your belongings if you fall behind on payments, but they can still pursue collection actions, lawsuits, or wage garnishment. Missing payments can hurt your credit, increase your balance with fees and interest, and lead to default if the debt remains unpaid. If you’re struggling with unsecured debt, credit counseling, debt consolidation, or bankruptcy may help you get relief and start fresh.

Written by Mae Koppes. Legally reviewed by Jonathan Petts
Updated July 1, 2025

A credit score is a three-digit number that reflects how you’ve used credit in the past, based on the data in your credit report. It's calculated using factors like your payment history, credit usage, account age, and recent credit activity. Credit scores can drop after missed payments or bankruptcy, but they’re not permanent. By understanding how scores work and taking small steps — like making on-time payments, lowering balances, and reviewing your credit reports — you can start rebuilding with a clear path forward.

Written by Attorney Karra Kingston. Legally reviewed by Attorney Paige Hooper
Updated March 14, 2026

Yes, debt collectors can take you to court for unpaid debt. But this won’t be their first move. Debt collection agencies will first call you and send notices in the mail to try to collect on unpaid debt. It’s common for debt collectors to make several attempts over a period of many months to collect a debt before they decide to sue you.

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated August 21, 2025

Secured debt is a loan backed by collateral, like a house or car, which the lender can take if payments aren’t made. Because the lender’s risk is lower, secured loans often come with easier approval and lower interest rates compared to unsecured debt. While this makes them a useful tool for big purchases or debt consolidation, the trade-off is the risk of losing the property if you fall behind. In bankruptcy, secured debt is treated differently than unsecured debt, and borrowers must decide whether to keep paying for the property or surrender it to the lender.

Written by Ben Jackson. Legally reviewed by Attorney Andrea Wimmer
Updated July 28, 2025

While you’re not required to hire a lawyer to file a bankruptcy case, you may want legal assistance. If so, there are several resources you can use to find an affordable bankruptcy attorney, including your state bar association’s website, the National Association of Consumer Bankruptcy Attorneys, or a local legal aid organization. Many bankruptcy lawyers also offer a free consultation for prospective clients. You can get free legal advice during the consultation and learn more about the lawyer’s fees and options for paying them.

Written by the Upsolve Team. Legally reviewed by Jonathan Petts
Updated November 7, 2024

If you're overwhelmed by credit card debt, filing for bankruptcy may be a way to erase it and get a fresh financial start. Many people consider options like credit counseling or debt management first, but bankruptcy can be a powerful solution when other methods aren't enough. This article will help you understand if bankruptcy is the right choice for dealing with your credit card debt.

Written by Ben Jackson. Legally reviewed by Jonathan Petts
Updated August 26, 2025

When you’re trying to figure out the best debt relief option, first consider how much debt you have, whether you want to call in outside help or support, how quickly you’re hoping to repay the debt, and how important your credit score is to you right now. You have several debt-relief strategies available to you, and each has its pros and cons.

Written by Ben Jackson. Legally reviewed by Jonathan Petts
Updated September 10, 2025

If you're overwhelmed by debt collectors and collection agencies calling you to collect a debt, it can seem as though you'll never be able to remember who they all are. But, it's important to give the bankruptcy court a list of all of your creditors, so here are some steps you can take to make sure you didn't miss anyone.

Written by Mae Koppes. Legally reviewed by Attorney Andrea Wimmer
Updated September 26, 2025

Rebuilding your credit after bankruptcy is possible — and many people do it successfully with the right approach. Bankruptcy gives you a financial reset, and by taking steps like using secured credit cards, paying bills on time, and monitoring your credit reports, you can start improving your score within months. It’s also important to avoid common mistakes, like opening too many new accounts or relying too much on credit in emergencies. With consistent habits and a clear plan, you can rebuild your credit and lay the foundation for long-term financial health.

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated September 5, 2025

Though bankruptcy provides real debt relief for folks who are struggling to make ends meet, not every debt is treated equally under bankruptcy law. Bankruptcy is a great way to get rid of credit card debt, medical bills, and personal and payday loans. But bankruptcy can’t wipe out recent income tax you owe, alimony, child support, or debt incurred from illegal acts (embezzlement, larceny, etc.). Though there’s a common misconception that student loan debt can’t be erased in bankruptcy, you can discharge, or wipe out, your student loan debt in Chapter 7 or Chapter 13 bankruptcy. You must prove that repaying it is causing undue hardship and that you’ve made good faith efforts to pay in the past.

Written by Lawyer John Coble. Legally reviewed by Jonathan Petts
Updated December 15, 2025

It’s important to rebuild your credit after a bankruptcy. The good news is that you’ll get plenty of offers for credit after your bankruptcy discharge. The bad news is that some of those offers won’t be great, with high interest rates or hidden fees. If you want to rebuild your credit, you need to find the right card to work for you. Read on to learn about some of your options.

Written by Ben Jackson. Legally reviewed by Jonathan Petts
Updated December 18, 2025

An automatic stay is a powerful protection that kicks in as soon as you file for bankruptcy. It stops most creditors from trying to collect debts. This means they can't call you, send letters, garnish your wages, or start or continue lawsuits against you. The protection lasts until your Chapter 7 bankruptcy case ends or the court lifts the stay.

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated July 27, 2023

If you're being sued by a creditor for an unpaid debt but you're in the process of filing bankruptcy, you may be wondering if you need to show up to your court date for the creditor's lawsuit against you. It will depend on when your court date is and where you're at in the process of filing your bankruptcy case. If you haven't filed your bankruptcy case by the court date for your creditor's lawsuit against you, make sure you attend the hearing. Otherwise, the judge can potentially grant a default judgment against you simply because you didn’t show up. If you have filed your bankruptcy case, it's still a good idea to show up to the hearing to let the judge know. Or you can contact the court clerk prior to the court date to let them know and see what they advise.

Written by Ben Jackson. Legally reviewed by Jonathan Petts
Updated March 11, 2026

If you receive a summons and complaint from a debt collector or creditor, it means you’re being sued for unpaid debt. It’s important to respond to (or answer) the lawsuit. You do this by filing official paperwork with the court. Be sure to address every point in the complaint, raise any defenses you have, and file the paperwork within the time frame provided. Debt collectors are counting on you not to answer the lawsuit so that they can win by default. Don’t be intimidated! Take control and learn how to file an answer by reading this guide. You do not need an attorney to answer a debt collection lawsuit successfully.

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated March 12, 2026

If a creditor or debt collector has sued you and gotten a court judgement against you, you have three main options: First, You can pay the debt. You may be able to negotiate a voluntary payment plan with the debt collector. Second, you can file to have the judgment vacated or removed. And third, you can file bankruptcy to discharge the debt and stop all collection efforts, including those related to a court judgment.

Written by Mae Koppes. Legally reviewed by Attorney Paige Hooper
Updated March 14, 2026

Legal aid provides free or low-cost legal help to people who can’t afford a lawyer. Some legal aid offices help with bankruptcy, but not all do — and many have limited capacity. Eligibility usually depends on income, but other factors like age, disability, or veteran status may also apply. If legal aid can’t take your case, you still have other options. Upsolve is a nonprofit that helps people get a fresh start using a free bankruptcy filing tool.

Written by Mae Koppes. Legally reviewed by Attorney Andrea Wimmer
Updated February 25, 2025

There’s no minimum or maximum debt required to file Chapter 7 bankruptcy — eligibility is based on your financial situation. However, for Chapter 13, your total debts must be less than $2,750,000, according to U.S. Courts.

Written by Curtis Lee, JD. Legally reviewed by Jonathan Petts
Updated February 14, 2026

An automatic stay goes into effect as soon as you file bankruptcy. This temporarily stops all debt collection activity, including eviction actions, as long as the landlord hasn’t already received a judgment in their favor. The automatic stay isn’t a permanent solution, though. It’s only a temporary measure that may buy you some time to deal with the eviction or find other housing.

Written by Attorney Paige Hooper. Legally reviewed by Jonathan Petts
Updated January 15, 2026

Filing bankruptcy affects a car lease differently than a car loan. A car lease isn’t considered a debt you owe, but you still need to report it in your bankruptcy paperwork. If you’re filing Chapter 7 bankruptcy, you can usually keep the lease if you’re current on payments, or you can give the car back and wipe out any remaining lease-related debt. In Chapter 13, you can typically keep the car and make payments as usual if you’re current, or you can fold past-due payments into your 3–5-year payment plan. Understanding how bankruptcy affects a car lease can help you decide whether to keep the car or walk away.

Written by Attorney Tina Tran. Legally reviewed by Jonathan Petts
Updated September 29, 2025

Your credit report has a lot of power over your daily life — whether that's when you're buying a new car or applying for an apartment. In addition to using credit responsibly, keeping an eye on your credit report is one of the most valuable things you can do to make sure your financial house is as stable as possible. There are three ways to request a copy of your free credit report.

Written by Attorney Paige Hooper. Legally reviewed by Jonathan Petts
Updated June 5, 2026

If you're planning to file for bankruptcy, you usually don't need to keep paying your credit cards. In Chapter 7, credit card debt is typically wiped out, so making payments may not make sense. In Chapter 13, your debt will be included in a repayment plan, so you can stop paying and focus on that instead. Chapter 7 and Chapter 13 have different goals and benefits, so knowing which type of bankruptcy you're filing will help you decide what to do.

Written by Attorney Tina Tran. Legally reviewed by Jonathan Petts
Updated June 10, 2024

Credit counseling is a great starting point for people who need help figuring out the best way to deal with their debt. Nonprofit credit counselors review your income and debt and help you develop a personalized plan to repay your debts. They’ll go over several potential debt relief solutions, including budgeting, starting a debt management plan, consolidating your debt, or filing bankruptcy.

Written by Ben Jackson. Legally reviewed by Jonathan Petts
Updated August 25, 2025

Yes, you can file bankruptcy even if you’re in or were in a debt relief program such as a debt management plan. Once you file your bankruptcy case with the court, you can stop making the payments under the debt relief plan you’re in (if you haven’t already). Once the bankruptcy court grants your discharge, you won’t have to worry about repaying the debts included in your case. Many people can benefit from other debt-relief options before filing bankruptcy, but sometimes bankruptcy is the best choice to meet your financial goals and take control of your debt.

Written by Jonathan Petts. Legally reviewed by Attorney Andrea Wimmer
Updated August 13, 2025

If you owe attorney fees when you go to file your bankruptcy case, most will be treated as unsecured debt and discharged as part of your bankruptcy case. There are some exceptions to this, especially for attorney fees related to family court matters. Keep reading to learn more about how attorney fees are treated in bankruptcy.

Written by Ben Jackson. Legally reviewed by Attorney Andrea Wimmer
Updated December 19, 2025

Priority debts are certain types of unsecured debts that are treated as more important in bankruptcy. They’re paid before other unsecured debts if there’s money available and often can’t be wiped out in Chapter 7. Common examples include child support, recent taxes, and unpaid wages. Even in a no-asset case where nothing gets paid, these debts can survive the bankruptcy and still need to be repaid.

Written by Ben Jackson. Legally reviewed by Attorney Andrea Wimmer
Updated September 3, 2025

Bankruptcy can be a helpful tool for seniors facing unmanageable debt, especially those living on fixed incomes with little to no assets. Chapter 7 is often the best fit for older adults who need fast relief from credit cards, medical bills, or personal loans — without risking important property. But bankruptcy isn’t always necessary, especially if your income is protected and your assets are limited. This guide explains the pros and cons, how to choose between Chapter 7 and Chapter 13, and what alternatives to consider if bankruptcy doesn’t feel right for you.

Written by Attorney Tina Tran. Legally reviewed by Attorney Paige Hooper
Updated March 11, 2026

Yes, a credit card company can sue you if you stop paying your bills. Typically, credit card companies will contact you several times before escalating the matter to legal action or charging off the debt to a debt collection agency. Though there’s no set timeline, you can expect legal action after six months of nonpayment. While there are no guarantees, you’re less likely to be sued if you owe less than $2,000.

Written by Mae Koppes. Legally reviewed by Attorney Andrea Wimmer
Updated March 11, 2026

Generally speaking, you can’t be pursued for your spouse’s debt unless you live in one of the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) or you’ve co-signed or co-borrowed on a loan or you have a joint account. In community property states, most debts incurred during the marriage are considered shared, which means creditors might be able to pursue both spouses for repayment, even if only one spouse signed for the debt.

Written by Attorney Andrea Wimmer. Legally reviewed by Attorney Paige Hooper
Updated January 21, 2026

Social Security Disability Income (SSDI) benefits are generally protected from garnishment, which means creditors can’t take this money to pay off most debts. But, there are some exceptions. Your SSDI benefits can be garnished to cover unpaid child support, alimony, federal taxes, or federal student loans.

Written by Attorney Kassandra Kuehl. Legally reviewed by Jonathan Petts
Updated October 22, 2025

Though it's a common myth, your debt doesn't disppear after seven years of nonpayment. Most debts drop off of your credit report after seven years, but in many cases, you'll still be on the hook to repay the debt.

Written by Attorney Jenni Klock Morel. Legally reviewed by Jonathan Petts
Updated March 11, 2026

Yes, you can settle a debt even if a lawsuit has already been filed against you. Some lenders may allow you to pay off your debt through either a repayment plan or partial lump-sum settlement. Either way, ignoring a debt is not a good option. It will only create more issues in the future. It can feel overwhelming to be served with a debt lawsuit. But remember, you’re not alone and you have options.

Written by Attorney Karra Kingston. Legally reviewed by Jonathan Petts
Updated March 12, 2026

When a creditor sues you and wins a court judgment, they gain powerful tools to collect the debt you owe. These tools include garnishing wages, levying bank accounts, or placing a judgment lien on your property — like your home or car. If a lien is placed on your car, it could put your vehicle at risk, depending on its equity and your state’s exemption laws. This article breaks down what happens when a creditor files a lien on your car, your legal rights, and the steps you can take to protect your property.

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated March 12, 2026

If a creditor sues you to collect on an unpaid debt and wins, they'll get a court judgment against you. This court order allows them to collect on the debt by seizing your real or personal property (or putting a lien on it), garnishing your wages, or levying your bank account. Personal property includes everything from household goods to vehicles. Real property includes things like your home or land. Though creditors can legally seize real and personal property that isn’t covered by an exemption, this isn't common because it can be costly for creditors. It's more common for creditors to use wage garnishment or a bank account levy.

Written by Attorney Andrea Wimmer. Legally reviewed by Jonathan Petts
Updated January 13, 2025

In rare cases, filing bankruptcy can help you get rid of private student loans, but they are much harder to get rid of than other kinds of debts like credit card debt or medical bills. To have your private student loans discharged you will need to prove that your loan was a qualified education loan and that paying off the loan would cause you “undue hardship.” You prove undue hardship as part of an adversary proceeding. This is an additional proceeding on top of your bankruptcy case. For private student loans, these proceedings are run a lot like a civil lawsuit. To file bankruptcy on private student loans successfully, many people chose to hire an experienced bankruptcy attorney.

Written by Attorney Jenni Klock Morel. Legally reviewed by Jonathan Petts
Updated September 30, 2025

Payday loans can provide quick cash but often come with extremely high costs that trap borrowers in a cycle of debt. When payments are missed, aggressive collection tactics may follow — but federal laws like the Fair Debt Collection Practices Act (FDCPA) protect you from harassment. While options like refinancing exist, they often make the debt more expensive. For many, bankruptcy offers a more permanent solution by stopping collections and potentially erasing payday loan balances. Understanding your rights and exploring all debt relief options can help you break free from payday loan debt for good.

Written by Attorney Jenni Klock Morel. Legally reviewed by Jonathan Petts
Updated March 12, 2026

If a creditor sues you for an unpaid debt and wins, the court issues a judgment against you. This gives the creditor the legal right to take serious collection actions like wage garnishment or bank levies. How long a judgment lasts depends on your state — some expire after five years, while others can remain in effect for up to 20 years. Many states also allow creditors to renew judgments. If you can’t afford to pay a judgment, filing for bankruptcy may help eliminate it.

Written by Attorney Kimberly Berson. Legally reviewed by Jonathan Petts
Updated July 29, 2025

If you’re overwhelmed by medical bills, Chapter 7 bankruptcy may offer a powerful path to relief by wiping out unsecured medical debt and stopping collections. This guide explains how Chapter 7 works, who qualifies, and what to expect if you decide to file — including a simple step-by-step breakdown of the process. It also covers important timing considerations and the pros and cons of filing, so you can make an informed decision. If bankruptcy isn’t the right fit, the article outlines alternatives like negotiating with providers, applying for hospital financial assistance, or working with a credit counselor.

Written by Attorney Paige Hooper. Legally reviewed by Jonathan Petts
Updated December 10, 2024

Yes, most secured debt can be discharged in bankruptcy. In Chapter 7 cases, that means your personal liability for the debt is wiped out with the Chapter 7 discharge. But since secured debts are connected to collateral, you don't get to keep the collateral unless you pay the debt. To do so, you may need to reaffirm the debt. In Chapter 13, you repay secured debts through the repayment plan. In both cases, you can surrender the collateral, which means the debt is no longer secured.

Written by Attorney Tina Tran. Legally reviewed by Jonathan Petts
Updated March 11, 2026

If Midland Funding is contacting you, they’re probably attempting to collect a debt. Before you do anything else, determine if the debt is valid. If it is but you can’t afford to pay it in full, you can try to negotiate a debt settlement. If Midland files a lawsuit against you, read the details thoroughly and respond quickly. Use this article as your guide to take on Midland Funding successfully.