The vast majority of your debts can be discharged (dismissed) in a chapter 7 bankruptcy including credit cards (with some limited exceptions), medical debts, personal loans including payday loans, rental related debts, utility bills, tuition and fees, and many more. Rather than provide an exhaustive list of debts that can be discharged, it is better to list which debts cannot be discharged. It is not a long list.
The following debts are not discharged:
- Certain tax debts. An attorney can explain whether your tax debts can be discharged.
- Debts owing to a governmental unit or agency with some exceptions.
- Domestic support obligations including alimony and child support.
- Debts that you were ordered to pay pursuant to a divorce decree or settlement.
- Student loans, including private student loans, with rare exceptions. The good news is the current administration is considering bankruptcy options for student loan debt. With student debt reaching record levels, the government may lessen the standards for discharging student loan debt. I will update this post with further developments regarding student loan debt and bankruptcy.
- Debts incurred by fraud or false pretenses if the creditor files an objection to discharge and wins in court.
- Significant unsecured debt purchases (credit cards and personal loans) including cash advances which were charged within the 90 days before filing but only if the creditor objects.
- Debts for personal injury related to drunk driving or willful and malicious injury.
- Debts that are not listed. There are exceptions to this. An attorney can explain.
- Court fines and restitution.