Can non-priority debts be totally wiped out?

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Can non-priority debts be totally wiped out?

Can non-priority (unsecured debts) be totally wiped out and eliminated or must one pay them back somehow, whether based on a % of the debt? I can’t find a definite answer. My guess is that non-priority debt cannot be eliminated 100%. It must be paid back somehow even only if partially. I know anything with a lien must be paid back but I’m confused on non-priority. Also, what is the “priority amount” and how is it typically determined and calculated?

Asked on May 16, 2012 under Bankruptcy Law, Texas


Kenneth Berger / Kenneth A. Berger, Attorney at Law

Answered 9 years ago | Contributor

I will answer your question below, but from reading your question, it appears that you should really consider hiring an attorney.

Unsecured debts are the most likely debts to be discharged (wiped out) in a chapter 7 filing; so, yes, they can be 100% wiped out.

In a chapter 13 best effort plan, some or all of the debts are partially repaid.

Home liens that impair your homestead exemption can be removed through a special motion process known as "avoiding the lien."

The "priority" of a debt primarily relates to which debts get paid first when a chapter 7 case has assets to pay out. 

Bankruptcy is complicated.  Please don't rely on your understanding of these complicated rules. 

As always, my comments are only applicable to Washington State and are not a substitute for getting competent, local, and more comprehensive, legal help.


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