Macco Law Group, LLP

Does Chapter 7 discharge all your debts?

Does Chapter 7 discharge all your debts?

If you think that Chapter 7 bankruptcy discharges all of your debts, think again. FindLaw explains that while it is true that Chapter 7 will discharge virtually all of your consumer debt, including your credit card debts, it will not discharge some other types of debt.

For instance, Chapter 7 cannot and will not discharge your following debts:

    • Student loans and any educational benefits overpayments you received
    • Court-ordered alimony and/or child support
    • Most taxes
    • Debts; i.e., judgments, you owe as the result of killing or injuring someone in a motor vehicle accident you caused while intoxicated from alcohol or drugs
    • Debts; i.e., restitutions, that a court ordered you to pay to someone against whom you committed a crime

Discharge denials

In addition to all of the above, the bankruptcy court can deny discharge of any debt for which you did one of the following:

      • Neglected to keep sufficient financial records and/or produce them when requested
      • Failed to adequately explain the loss of the asset
      • Engaged in perjury when testifying about the asset
      • Illegally concealed, transferred or destroyed the asset before it could become part of your bankruptcy action

Furthermore, the court can refuse to give you any discharges whatsoever if you neglected to successfully complete an instructional financial management or other course it ordered you to take.

Finally, if you choose to reaffirm a debt you owe to one of your creditors, the court will not discharge it. You must, however, enter into a written reaffirmation agreement with that particular creditor prior to the date set for the court to enter the discharge.