The debts you pay back after filing bankruptcy in Oklahoma County depend on whether you file Chapter 7 or Chapter 13, what kind of debts you owe, whether any debt is secured by property, and whether the debt is dischargeable. Bankruptcy can eliminate many unsecured debts, but it does not automatically erase every obligation. A bankruptcy discharge generally removes your personal legal obligation to pay certain debts. However, some debts survive bankruptcy. Other debts may need to be paid if you want to keep property such as a home or vehicle. In Chapter 13, you may also repay some or all debts through a court-approved repayment plan.

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Chapter 7 and Chapter 13 Work Differently

In Chapter 7 bankruptcy, many unsecured debts may be discharged without repayment. This often includes credit cards, medical bills, old utility bills, personal loans, repossession balances, and some lawsuit judgments. If the debt is dischargeable, the creditor generally cannot continue trying to collect it after the discharge.

Chapter 13 works differently. In Chapter 13, you make payments through a repayment plan that usually lasts three to five years. Some creditors may be paid in full. Others may receive only a percentage of what is owed. At the end of a successful Chapter 13 case, many remaining dischargeable debts may be eliminated.

Secured Debts May Still Need to Be Paid

A secured debt is a debt tied to collateral. Common examples include a mortgage on a house, a loan on a vehicle, a financed mobile home, or a loan secured by equipment or other property.

Bankruptcy may eliminate your personal liability on some secured debts, but it does not automatically remove the creditor’s lien from the property. If you want to keep the house, car, or other collateral, you usually must stay current on the payments or deal with the debt through your bankruptcy plan.

For example, if you file Chapter 7 and want to keep your car, you may need to continue making payments, reaffirm the debt, redeem the vehicle, or otherwise address the lender’s rights. If you file Chapter 13, the car loan may be paid through the plan depending on the facts.

Mortgage Payments After Bankruptcy

If you want to keep your home, you usually need to keep paying your mortgage after filing bankruptcy. Chapter 7 may discharge personal liability for mortgage debt, but the mortgage lien generally remains attached to the home. If payments are not made, the lender may eventually seek foreclosure relief.

Chapter 13 may help if you are behind on your mortgage. You may be able to cure mortgage arrears through the plan while continuing regular monthly mortgage payments. This can be one reason Chapter 13 may be better than Chapter 7 for someone trying to stop foreclosure and keep a home.

Car Payments After Bankruptcy

Vehicle loans also require careful review. If you want to keep the vehicle, you generally need to keep paying for it. In Chapter 7, the lender may require you to reaffirm the debt, redeem the vehicle, or surrender it. Reaffirmation means you agree to remain personally liable for the car loan after bankruptcy.

In Chapter 13, the vehicle loan may be included in the repayment plan. Depending on the age of the loan, value of the vehicle, interest rate, and bankruptcy rules, the plan may change how the debt is paid. However, you should not assume the vehicle is automatically safe without reviewing the loan and plan treatment.

Child Support and Alimony Are Not Wiped Out

Domestic support obligations such as child support and alimony are not discharged in bankruptcy. If you owe child support or spousal support, you should expect those obligations to continue.

In Chapter 13, you generally must stay current on ongoing domestic support obligations and address past-due support as required. Failure to pay support can create problems in the bankruptcy case and outside the bankruptcy case.

Certain Taxes May Survive Bankruptcy

Some tax debts may be discharged, but many taxes survive bankruptcy. Recent income taxes, payroll taxes, trust fund taxes, tax liens, and tax debts connected to fraud or failure to file may not go away.

Older income taxes may sometimes be dischargeable if strict requirements are met, including timing rules related to when the return was due, when the return was filed, and when the tax was assessed. Tax debt should always be reviewed carefully before filing.

Student Loans Are Usually Not Automatically Discharged

Most student loans are not automatically discharged in bankruptcy. A debtor usually must file a separate proceeding and prove undue hardship to discharge student loan debt. This is a higher burden than ordinary unsecured debt.

That does not mean student loan debt can never be addressed, but it should not be assumed that a normal Chapter 7 or Chapter 13 filing will automatically erase student loans.

Criminal Fines, Restitution, and Court Costs

Criminal fines, restitution, and many criminal court obligations usually survive bankruptcy. Bankruptcy is designed to address civil debt problems, not erase criminal punishment.

If you owe restitution or criminal fines, you should tell your bankruptcy attorney before filing. These debts may affect your budget, plan payments, and post-bankruptcy obligations.

Debts From Fraud or Intentional Wrongdoing

Some debts may be challenged by creditors and declared nondischargeable. This may include debts arising from fraud, false pretenses, willful and malicious injury, embezzlement, larceny, fiduciary misconduct, or certain drunk-driving injury claims.

A creditor may need to file an adversary proceeding in the bankruptcy court to object to discharge of a particular debt. If that happens, the bankruptcy case becomes more complicated because the court must decide whether the debt should survive.

Debts You Choose to Keep Paying

Some debts may be legally dischargeable, but you may choose to keep paying them for practical reasons. This often happens when a debt is tied to property you want to keep, such as a car or home. It may also happen when a family member co-signed a loan, and you do not want the collection shifted to that person.

You should discuss these choices with your attorney. Paying one creditor while ignoring others before or during bankruptcy can sometimes create problems, especially if the creditor is a family member or insider.

Co-Signed Debts

If someone else co-signed a debt with you, your bankruptcy may protect you but not necessarily the co-signer. After your discharge, the creditor may still pursue the co-signer if that person is legally responsible for the debt.

Chapter 13 may provide more protection in some consumer co-debtor situations while the case is pending. However, the co-signer issue should be reviewed before filing so everyone understands what may happen.

Debts Incurred After Filing Bankruptcy

Bankruptcy generally deals with debts that existed before the case was filed. New debts incurred after filing are usually not discharged in that bankruptcy case.

For example, if you file bankruptcy and then later incur new medical bills, new credit cards, new taxes, new utility charges, or new loans, those debts may remain your responsibility. Bankruptcy is powerful, but it is not a protection against all future debt.

What Happens to Credit Cards and Medical Bills?

Most ordinary credit card debts and medical bills are unsecured debts. In Chapter 7, they are often discharged if no creditor successfully objects. In Chapter 13, they may receive partial payment through the plan and the remaining dischargeable balance may be wiped out after successful completion.

However, recent luxury purchases, cash advances, false financial statements, or fraud allegations can create discharge disputes. A debtor should be honest with the attorney about recent credit use before filing.

Talk to an Oklahoma County Bankruptcy Attorney

After filing bankruptcy in Oklahoma County, you may still need to pay secured debts if you want to keep the collateral, domestic support obligations, certain taxes, student loans unless separately discharged, criminal fines or restitution, nondischargeable debts, and new debts incurred after filing. In Chapter 13, you also make plan payments according to the court-approved plan. If you are considering bankruptcy, speak with an experienced Oklahoma bankruptcy attorney before filing. Our bankruptcy team at OKC Attorneys can help. Call us today at 405-367-8710 or ask a question online.