What Debts Are Discharged in Chapter 7 Bankruptcy?

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 16, 2022

The vast majority of debts can be discharged under chapter 7 bankruptcy, including credit card debt, medical debt, and past-due utility bills.

Particularly under chapter 7, debtors who have filed for bankruptcy honestly and in good faith can get the majority of their debt erased.

What Cannot Be Discharged in Chapter 7 Bankruptcy?

Some debts that cannot be discharged in chapter 7 bankruptcy are student loans, spousal alimony, child support, debts owed to the government as fines, and debts incurred from intoxicated driving.

Besides these, any debts that the court deems fraudulent or in bad faith are unlikely to be discharged. Creditors may object to certain debts being discharged, but the court has the final say.

When Will My Chapter 7 Bankruptcy Be Discharged?

Your chapter 7 bankruptcy will discharge your debts around 60 days after the 341(a) meeting of creditors.

Typically, this means that the court will discharge your debts about four months after you first file. Barring any bad faith claims on your paperwork, chapter 7 cases tend to move quickly.

What Is a Discharged Bankruptcy Chapter 7?

A discharge in bankruptcy means that you will be off the hook for paying the covered debts.

Not all debts can be discharged under chapter 7, but many of the most common forms of debt can. Credit card debt and medical bills are dischargeable, for example.

FAQs

What does bankruptcy mean?

Bankruptcy is a legal proceeding in which a debtor declares their inability to pay back their creditors.

What are the different types of bankruptcy?

There are three common types of bankruptcy known as “chapters” in the U.S. bankruptcy code, Ch. 7, Ch. 11, and Ch. 13, each with varying criteria and consequences.

What is Chapter 7 bankruptcy?

Chapter 7 is known as a liquidation bankruptcy. Most of your property will be sold to pay off your debts, then whatever debt in excess of the value of your liquidated property will be cleared.

What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy is a reorganization bankruptcy. With Chapter 13, you are able to keep your personal property and reorganize your debts to a payment schedule that enables you to pay back your creditors over time (often 3 to 5 years).

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

Find Advisor Near You