What does Debt mean?
A debt can be anything owed to another person. In bankruptcy terms, any non-exempt debt that can be financially liquidated is considered an obligation of the bankruptcy estate. Normally, debts are reduced in bankruptcies to the value a debtor is required to pay by bankruptcy law. A filing debtor can be forced to pay all or only a portion of a debt, depending on the type of bankruptcy filed and the bankruptcy laws governing that particular type of bankruptcy.
There are a variety of different types of debts in bankruptcy law. Debts can be services not yet rendered, monetary debts not yet realized, like contingent debts, non-liquidated debts, and disputed debts, or they can be monetary debts already realized that can include unsecured and secured debts.
Consider, not all debts can be discharged in bankruptcy. For instance, unsecured debts can generally be discharged in Chapter 7 bankruptcy although debts such as federal school loans, certain tax debts and spousal and child support payments are not discharged (exceptions exist for some debts if the debtor can prove undue hardship). Chapter 13 does not immediately discharge any types of debts. Chapter 13 allows the debtor to create a 3 or 5 year repayment plan to repay debt obligations. Unsecured debts, which are not repaid within the plan, are discharged at the completion of the plan. Secured debts are not discharged by Chapter 7 or Chapter 13 bankruptcy.