What debts can be discharged in a Chapter 7 Bankruptcy?

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A Chapter 7 Bankruptcy is a liquidation bankruptcy. This means that all of the debtor’s nonexempt properties are sold then the proceeds are given to all of the creditors. This type of bankruptcy is most common for individuals. It is also the most common form of filing for bankruptcy in the United States. By filing this for this form of bankruptcy many of the debtor’s financial obligations are discharged, and they do not have to be paid back. This path can help people who have gone through a divorce. Divorces can often leave people with debts and/or other financial obligations they can not afford. This can help people wipe out any debt left to them by their ex-spouse. But be aware Chapter 7 is subject to exceptions, consult with your Provo Divorce Lawyer before filing anything to discuss the discharges. 


Debts that can be discharged include:

– credit card debt

– medical bills

-unsecured personal loans


-auto repossessions

-home foreclosures

-business loans

-payday loans

-other secure and unsecured debts


Debts that usually not discharged are:

-Certain types of taxes

-student loans

-Attorney’s fees for child support or custody

-criminal restitution or other crime/court related fines or penalties

-cooperative housing fee debt

-child support


-penalties or fine owed to government agencies

-personal injury debts (from a drunk driving accident)


Other non-dischargeable debts come from the creditor challenging a discharge and being successful. This decision will come from a hearing, during which the creditor and bankruptcy filer to explain their argument. If the creditors fails to object or the court rules in the debtors favor the debt will be discharged. 


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