Reducing Credit Card Bills & Other Unsecured Debt
	General Rule. Unsecured debt such as credit cards, medical bills, and lawyer bills can be eliminated entirely in a Chapter 7 filing or sharply reduced in a Chapter 13 plan. There are some limited exceptions, such as child support, recent credit card purchases for luxury items or cash advances, court fines, etc.

Credit card debt, judgments, lawyer bills, medical bills, and other unsecured debt can almost always be fully wiped out (discharged) in a Chapter 7 filing. And most of it may be able to be discharged in a Chapter 13 plan, depending on your ability to pay.

Exceptions include a few items such as child support, maintenance (alimony), debts incurred in a divorce case (Domestic Support Obligation), some taxes less than 3 years old, most student loans, and recent credit card charges for luxury items and cash advances. Also some less obvious debts such as court fines, drunk driving injury, and debt on account of fraud or theft cannot be eliminated.

	See the Chapter 7 example on this site to see how credit card bills and other unsecured debt can be eliminated. You will also see in this example, how you can eliminate car debt or lease in a Chapter 7 by turning the car back to the lender. Also, some secured liens can be changed to be unsecured debts through a strip-off or strip-down process, as is also shown on this site.

And sometimes you can do a workout to reduce these bills if you do not file bankruptcy.

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