Can Secured Debt Be Discharged in Bankruptcy?

Yes, secured debt can be discharged in bankruptcy. In a Chapter 7 bankruptcy, all of your assets are liquidated and used to pay off your debts. If you have any secured debts, the creditor can take back the collateral (the asset that secures the debt, such as your car or house), but they must return any surplus proceeds to you. In a Chapter 13 bankruptcy, you enter into a repayment plan where you make monthly payments to your creditors over 3-5 years. At the end of the repayment period, any remaining balance on your secured debts is discharged.

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