Filing for bankruptcy in Arizona can give you a powerful fresh start—but not all debts are treated the same. Some debts can be wiped out completely, while others may stick with you even after your case is closed. Knowing which debts qualify for discharge can help you make informed decisions and avoid surprises down the road.
At Arsenal Law, we help clients understand which debts can be eliminated through Chapter 7 or Chapter 13 bankruptcy—and which ones require a different strategy.
A bankruptcy discharge is a court order that releases you from personal liability for certain debts. This means you’re no longer legally required to pay those debts, and creditors cannot take collection actions against you.
In most Chapter 7 and Chapter 13 cases, the following debts are eligible for discharge:
These debts are considered unsecured debts, meaning they are not tied to collateral. Most unsecured debts are discharged in Chapter 7, and many are partially or fully discharged in Chapter 13 after the repayment plan is completed.
Certain debts are generally not eligible for discharge in bankruptcy. These include:
In rare cases, some of these debts may be reduced or reorganized in Chapter 13, but they are typically not dischargeable.
Secured debts—like mortgages and car loans—are tied to specific property. Bankruptcy may discharge your personal liability, but the lender can still repossess or foreclose on the property if you stop making payments. So, the creditor can take back the property if you do not keep up with your payments, but they will not be able to sue you or do anything else to try to collect the balance of the loan from you.
That’s why, if you want to keep your home or vehicle, you’ll need to stay current on payments or use Chapter 13 to catch up over time.
Some older income tax debts may be discharged if:
Whether past tax debt is dischargeable always requires a specific evaluation of your past tax return history, so it is impossible to state whether they can be discharged until doing that evaluation.
Student loans are generally not dischargeable unless you prove undue hardship, which is a high legal standard. Courts look at whether:
If you have significant tax or student loan debt, we can help evaluate whether bankruptcy is the right tool—or if alternative strategies are better.
At Arsenal Law, we take time to review your debts in detail and explain how each one will be handled in bankruptcy. We guide you through the best options to eliminate or reduce debt, protect your property, and move forward with a clean slate.
Free Consultation – Know What Bankruptcy Can Do for You
Don’t wait to find out after filing what debts will remain. Schedule a consultation with Arsenal Law and get answers now. Whether you’re dealing with credit card debt, medical bills, or tax problems, we’ll help you understand your legal options and protect your financial future.
Call 480-582-5228 or book online at www.ArsenalLawAZ.com
