What debts can be included in a Chapter 7 Bankruptcy
One of the most frequently asked questions regarding bankruptcy is, “what debts can be included in a chapter 7 bankruptcy.” For some reason there is a misconception amongst the general public that certain debts cannot be included in a chapter 7 bankruptcy. For example, a lot of people believe that you cannot include credit card debt in a chapter 7 bankruptcy? Also, several people have stated that they did not think a judgment could be included in a chapter 7 bankruptcy? As I previously stated, these are misconceptions and are not true. You can include credit card debt in a chapter 7 bankruptcy regardless of the amount and regardless of how old the credit card debt is. Likewise, in most cases, you can also include judgments in a chapter 7 bankruptcy. If credit cards and judgments could not be included in a chapter 7 bankruptcy then the vast majority of bankruptcies would never be filed!
Another common misconception that a lot of people have is that after filing a chapter 7 bankruptcy and including specific credit card debts in the bankruptcy, you still may be responsible to pay off the credit card debts that were included in the bankruptcy? This is not true! Once you file a bankruptcy the credit card debt is washed away forever and you will never be legally obligated to pay it back, ever! A few months ago, a very nice, sweet, elderly lady came to my office for a free chapter 7 bankruptcy consultation. During the consultation she stated that she needed to file a bankruptcy “again” to get rid of an old credit card debt she had been paying on since “the last bankruptcy I filed.” I asked her to explain what she meant by her statements, she explained that ten years ago she had filed a chapter 7 bankruptcy and had included a credit card debt. However, shortly after filing the credit card company called and requested that she continue making payments. She simply assumed that if they were calling her asking for payment that she was obligated to pay it. She had been paying on a credit card debt for ten years that had legally been washed away in her bankruptcy! Ouch! Do not make the same mistake, if you include a credit card debt in a bankruptcy, regardless of what the credit card company says to you, you do not have to pay it back!
There are very few debts that cannot be included in a chapter 7 bankruptcy, most debts can be included! Once you have included these debts in the bankruptcy, you are no longer obligated to pay on them; the chapter 7 bankruptcy literally washes them away forever. If any creditor that was included in your chapter 7 bankruptcy contacts you after the bankruptcy has been filed then that creditor is in direct violation of existing bankruptcy law and can be punished severely!
Here is a list of commonly incurred debts that can be included in a chapter 7 bankruptcy:
Judgments (most types)
HOA fees incurred prior to filing
Pay day loans (incurred more than 70 days before filing)
Cell phone bills