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Can Chapter 7 bankruptcy discharge all my debts?

Filing for Chapter 7 bankruptcy is an aggressive but effective means of dealing with unmanageable debt. While it is not right for everyone, it can make a significant difference in the lives of people who file for this type of protection.

Chapter 7 is a form of bankruptcy that discharges all eligible debts. In other words, filers will no longer be responsible for the affected debts. However, it is crucial to understand that some sources of debt are not eligible for discharge and will remain, even if you file for Chapter 7 bankruptcy.

Debts that are eligible for discharge

In most cases, the following types of debt are eligible for discharge in Chapter 7. 

  • Medical bills
  • Credit card debt
  • Personal loans
  • Utility bills

Debts that generally are not eligible for discharge

If you carry any amount of the following types of debt, it is likely that they will remain after a Chapter 7 bankruptcy filing, though there are exceptions. These debts include: 

  • Debts from child or spousal support
  • Tax debts
  • Debts related to personal or malicious injury
  • Debts stemming from restitution orders for a criminal conviction
  • Most student loans
  • Debts owed to condominium or homeowners' associations
  • Debts that were not included in the lists and schedules filed with the court

Determining whether Chapter 7 is right for you

If most or all your debt is eligible for discharge in Chapter 7, then it may be an option worth considering. Even if you also carry debt that is not eligible for liquidation, it can be easier to pay those down when bankruptcy filing eliminates other debts for which you were responsible.

Understand that there are other considerations to think about when it comes to filing for bankruptcy in Tennessee, so it can be wise to discuss your situation and options with an experienced attorney. A legal representative can help you understand your options and take control of your situation so that you can pursue a better financial future.

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We help people file for bankruptcy relief under the Bankruptcy Code.