You may have heard that a Chapter 7 bankruptcy discharges all of your debts. A discharge removes all legal responsibility of the debtor to pay the debt. A creditor may no longer seek repayment on discharged debt. While many debts can be discharged through a completed Chapter 7 bankruptcy, some debts are not eligible to be discharged.
What Debts Can Be Eliminated With a Chapter 7 Bankruptcy?
As long as a debt is not related to fraud, the bankruptcy code allows for most debts to be discharged in bankruptcy. Some of the most common debts include:
- unsecured debts, such as credit card charges
- collection agency accounts from a variety of sources
- medical bills
- personal loan
- past rent
- some civil court judgment
- past due utility bills
What Debts Cannot Be Eliminated with a Chapter 7 Bankruptcy?
The federal code includes 19 types of debt that cannot be discharged through bankruptcy. These debts include;
- debts that you have incurred since the initial bankruptcy filing
- child support obligations
- spousal support obligations
- student loans
- past income taxes
- debt that results from fraud
- loans owed to a pension or retirement fund
- fines owed due to the wrongful death or personal injury of another caused by operating a vehicle of any kind while under the influence of alcohol or drugs
Will I Be Able to Keep my Home if I File Chapter 7?
If you are considering filing for a Chapter 7 bankruptcy, keeping your home or vehicle may be of concern to you. These are considered secured loans with the actual home or vehicle serving as collateral to ensure the repayment of the loan. If you continue to make timely payments then you can exclude these debts from your bankruptcy filing. If you find that you need to include a secured loan in a Chapter 7 bankruptcy filing you will need to surrender that property to help cover your obligation.
Need help with your Chapter 7 bankruptcy? Our Clark and Washington attorneys can help you navigate the bankruptcy process and ensure that your rights are protected. Contact us today for a free consultation.