Generally speaking, unsecured debts are dischargeable in bankruptcy. Among the most common kinds of debts subject to discharge are: credit card debts, medical debts, unsecured loans, loan balances on foreclosed properties which are not covered by the anti-deficiency statues (i.e. home equity lines of credit), personal loans, deficiency balances on repossessed vehicles, and some taxes. A valid discharge will protect you from collection efforts on these kinds of debts, even if a judgment was entered against you.
Of course, there are exceptions to this generality. For instances, not all personal taxes can be discharged. In order to be dischargeable, the tax debt must be old enough, and the IRS cannot have levied for the back taxes. Click here for more information onhow tax debts are handled in bankruptcy. Also, Student loans and domestic support obligations (i.e. spousal maintenance and child support) are both usually unsecured debt, but are non-dischargeable.
The bankruptcy code also restricts certain kinds of unsecured debts from discharge, but only if an adversary proceeding is brought. An adversary proceeding is a case within a bankruptcy case, in which a trial is conducted to determine if a debt should be discharged. Typically, these types of cases involve allegations that the debt was incurred by fraud, or by a person acting in breach of their fiduciary duties, embezzlement, larceny, or result from willful and malicious injury. Credit card companies will often sue in these kinds of cases when they see evidence of increased or unusual credit card usage just prior to filing for bankruptcy.
There are numerous other kinds of unscecured, non-dischargeable obligations which do not usually apply to most people. If you are having difficulties with your creditors, bankruptcy might be a viable option for you. Contact a competent attorney to aid you in your assessment and, if necessary, in helping you prepare and file a bankruptcy.