The answer to what bills you’ll need to pay when filing for bankruptcy depends on which type of bankruptcy you declare. You may want to read about the two different types of bankruptcy for consumers in debt: Chapter 7 and Chapter 13. Even when debt has gotten out of hand, bankruptcy is not a step that shouldn’t be taken lightly, and you’re smart for trying to learn all you can.
The bills you’ll have to pay with Chapter 13 bankruptcy:
In your ‘debt reorganization,’ you will end up paying most of your past-due bills through the single monthly payment that the court has mandated. That plan will reflect any reduction in your original obligations that may have been negotiated.
What you may not need to pay if you declare Chapter 7 bankruptcy:
‘Unsecured debt’ such as balances on a bank-issued credit card, medical bills, and overdue utility bills may be ‘discharged’, meaning those ‘non-priority obligations would no longer need to be paid back.
What you’ll probably still need to pay with Chapter 7:
‘Secured debt’ such as mortgage loans, car loans, and balances on store-issued credit card must be paid back in the sense that you may need to return the house or other item to the creditor. With personal loans that you originally put up collateral for, you’ll likely need to give up that collateral asset.
Student loans will still most likely need to be paid back. So will money you owe for back taxes or court-imposed fines. Child support and alimony obligations will still stand.
Certain ‘undue hardship’ exceptions can relieve your obligation for some of those, but it can be a difficult standard to meet.
Get all the facts.
If you’re asking, “what bills do I have to pay if I file for bankruptcy,” chances are you’re considering this option and trying to understand just how much bankruptcy will protect you. Since everyone’s circumstance is different, the detailed answers you need can be provided by an attorney who has wide experience in bankruptcy cases. If you own a home, your attorney will discuss strategies to try to avoid foreclosure.
You’ll also be relieved to know that when you file for either type of bankruptcy, an ‘automatic stay’ will, for now, stop most of the threatening calls and letters from creditors, no matter how those obligations end up getting handled.