When you file for bankruptcy, you will be required to disclose your debts—which are also called creditor claims in bankruptcy court—and classify them as secured (home mortgage), unsecured (credit cards), priority unsecured (child support, alimony), or nonpriority unsecured (credit cards, medical bills).

Priority unsecured debts cannot be discharged in a Chapter 7 bankruptcy, and you will remain responsible for them after your Chapter 7 bankruptcy. Priority unsecured debts also cannot be discharged in a Chapter 13 bankruptcy, and must be paid in full in a three-to-five-year repayment plan.

In South Carolina, as in all states, when filing for bankruptcy, individuals are required to list all of their debts and categorize them according to their nature. Secured debts are those tied to an asset, like a home mortgage. Unsecured debts are not tied to any asset and include credit card debts and medical bills. Among unsecured debts, there are priority unsecured debts, such as child support and alimony, which are given special status. In a Chapter 7 bankruptcy, priority unsecured debts are not dischargeable, meaning the debtor remains responsible for these debts even after other debts may be discharged. Similarly, in a Chapter 13 bankruptcy, while the debtor can reorganize their debts into a more manageable repayment plan, priority unsecured debts must still be paid in full over the course of the three-to-five-year repayment plan period. It's important to accurately classify debts in the bankruptcy process, as this determines how they will be treated. Debtors in South Carolina considering bankruptcy should consult with an attorney to understand how their debts will be handled under the bankruptcy code.