What are the most common general unsecured claims?

When you file bankruptcy, the bankruptcy clerk must notify the creditors you listed on your bankrtupcy petition.  Creditor's claims are divided into secured and unsecured. The most common general unsecured claims in bankruptcy include unsecured credit card debt, department store charges, installment debt, medical bills and utilities. Secured claims such as a mortgage on your house or a loan on your car have priority in bankruptcy and are paid first. Any money left over is used to pay unsecured claims.  When you file Chapter 7, your unsecured debt is wiped out so you can start fresh.  So if you have substantial debt and little assets, Chapter 7 may be a better Chapter for you file under.   For individuals that do have assets they want to keep, Chapter 13 is a good choice.

If you file Chapter 13, any unsecured debt is discharged after you complete your 3-5 year repayment plan with your creditors. There are certain statutory debts that you cannot get discharged in bankruptcy no matter which Chapter you file under. These include:

• State, federal and municipal taxes (exception for federal taxes that are 3 years or older)
• Student loans (unless you can prove a hardship)
• Spousal and child support
• Debts caused by debtor while intoxicated or using drugs
• Debts caused by debtor as a result of a personal injury accident
• Debts resulting from fraud or embezzlement

If you are contemplating filing bankruptcy, you should consult with a bankruptcy attorney to determine which Chapter you should file under. The attorney can answer your questions regarding general unsecured claims and secured claims and other bankruptcy questions.  The attorney can prepare your bankruptcy petition and other bankruptcy documents, and represent your interests in court.