What Gets Discharged in Chapter 7 Bankruptcy

: Reese Baker & Associates

  Filed under: Chapter 7

When people find themselves in financial hardship, they wonder if bankruptcy would be a good option for them. Chapter 7, bankruptcy is considered a liquidation bankruptcy. Your trustee will evaluate your income, bills, and assets and determine if any of your nonexempt assets can be sold to satisfy your creditors. In most cases, you will not lose any assets due to the generous exemption rules.

Chapter 7 bankruptcy takes three to six months to complete. At the end of that time, your qualifying debts will be discharged, and you will not be obligated to pay them.

Qualifying debt

Some qualifying debt includes;

  • Most credit cards
  • Back utility debt
  • Payday loans
  • Medical bills
  • Sometimes, old tax debt

Not Dischargeable

What cannot be discharged in any bankruptcy is:

  • Alimony
  • Child support
  • Fines owed to government agencies
  • Most student loans
  • Taxes due less than three years old
  • Student loans
  • Debts not included in your bankruptcy paperwork
  • Debts you formally agreed to pay by “reaffirming” them in the creditors meeting
  • Debts incurred by fraud

Sometimes credit card companies will make accusations of fraud against you to leverage you into reaffirming or agreeing to, pay the debt. If you have done nothing wrong, you should never agree to reaffirm a debt.

If you have unsecured debt that you would like to be eliminated, contact a Houston bankruptcy attorney to discuss what options you may have.