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Chapter 7 bankruptcy: Dischargeable vs. nondischargeable debts

On Behalf of | Jan 14, 2022 | Chapter 7 Bankruptcy

When there is no other way out of your current financial situation, filing for bankruptcy may be your only option. When you decide to declare bankruptcy, you expect to be relieved of your debts and get your finances in order. While it may be the case, there are certain financial obligations you still have to meet. 

Here is more on what you need to know about dischargeable and nondischargeable debt before filing for Chapter 7 bankruptcy.

Which debts will you be left with?

In most cases, unsecured debts are usually discharged by filing for Chapter 7 bankruptcy. It means that you are not obligated to pay them. They include medical bills, credit card debt, back rent, or even money owed to family or friends.

However, the following debts cannot be discharged:

  • Child support and alimony
  • Debts that were not disclosed when filing for bankruptcy
  • Court fees
  • Some unpaid taxes
  • Obligations arising from personal injury or wrongful death claims caused by driving under the influence, among others

Sometimes, creditors may object to a discharge and have their debts declared nondischargeable. For example, if you went on a spending spree using your credit card shortly before declaring bankruptcy, you may be required to pay back the debt. Other instances include debts from fraud, embezzlement, or theft.

Planning ahead

Before filing for bankruptcy, you need to compare the debts that will be discharged against those that will not. With that, you can decide on the best solution that suits your interests. It will also help you plan how you will get back on your feet and regain your financial stability.

All’s not lost after declaring bankruptcy. With the right strategy and a positive mindset, you can recover and bounce back sooner than you think.


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