Disclosure Statements

Debtors must report assets, liabilities, contested claims, and other business affairs. The purpose of these disclosures is to allow creditors an opportunity to evaluate proposed plans. Disclosure statements must contain "adequate information." The specific information required is determined on a case by case basis by the court and may include any information which the court deems reasonable and necessary for parties in interest to reach informed decisions before voting on plan confirmation.

Dischargeable Debts

Dischargeable debts are those debts that can be discharged through bankruptcy proceedings. A debtor is no longer personally liable to pay for dischargeable debts after the bankruptcy proceedings are concluded.

Dischargeability of Debt

Discharging a debt in bankruptcy means that the debt is eliminated or wiped out. However, not all types of debts can be discharged in a bankruptcy proceeding.

Unsecured Claims

Unsecured debt may be generally described as a debt where credit was granted based solely upon the promise or ability of the debtor to pay. Claims that are not secured by any collateral or subject to setoff are generally unsecured claims. For purposes of bankruptcy, unsecured claims are classified and paid based on a priority list described in the Bankruptcy Code. Each class must be paid in full before the next lower class is paid anything.

Treatment of Property Settlement Claims

Certain property settlements are not dischargeable in a Chapter 7, 11 or 12 bankruptcy case, but remain dischargeable in Chapter 13 cases. Support, alimony or maintenance that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court are generally not dischargeable.