Are All Debts Dischargeable Under Chapter 7 Bankruptcy? Bankruptcy

Are All Debts Dischargeable Under Chapter 7 Bankruptcy?

Life Insurance Funds & Bankruptcy: What You Need To Know

If you’re feeling overwhelmed with past due bills or are being hassled by debt collectors, you may be wondering whether filing for bankruptcy is right for you and how much of your debt can be discharged. Although there are some types of debt that cannot be eliminated by bankruptcy, you may still be able to get the relief you need with a discharge of significant amounts of your debts. Consulting with a Gilbert bankruptcy attorney is the best way to discover which of your debts are dischargeable.

Filing For Chapter 7 Bankruptcy In Arizona

What Type Of Debt Is Dischargeable In Bankruptcy?

There are two types of debt in most types of bankruptcy: dischargeable and non-dischargeable. Debt that can be eliminated in Gilbert Chapter 7 bankruptcy is considered dischargeable. Creditors can no longer make efforts to collect the debts and you are no longer obligated to make payments.

What Debts Are Dischargeable In Chapter 7 Bankruptcy?

Many types of debt can be eliminated in a Chapter 7 bankruptcy. These generally include:

Credit Card Debt

One of the most common reasons for filing for bankruptcy is overwhelming credit card debt. With only a few exceptions, bankruptcy can be an effective way to eliminate credit card debt and get your finances back on track.

Medical Debt

Another common cause of financial overwhelm, medical debt can typically be discharged through bankruptcy. Bankruptcy can be a viable solution for people who are struggling with exorbitant hospital bills after a serious illness or debilitating medical condition.

Past Due Rent

If you are facing a court-ordered eviction due to past due rent, filing for bankruptcy can be one way to stop the debt collection process while also eliminating past due rent.

Past Due Utility Bills

Even if you have moved, you may be facing pressure from utility companies to pay past due utility bills. Like past due rent, filing for bankruptcy can stop collections from taking action and eliminate your past due utility bills.

Payday Loans

These types of loans typically come with extremely high interest rates and short repayment terms. However, people who need a payday loan are often unable to repay the loans and the accrued interests, leading to financial distress that can be discharged through Gilbert Chapter 7 bankruptcy.

Personal Loans

People who are struggling financially often utilize personal loans as a way to pay off their existing debts. Unfortunately, this tends to create more problems due to the high interest rates these loans generally carry.


Individuals who are underinsured or uninsured may find themselves owing tremendous amounts of money after a car accident for which they were primarily liable. Filing for bankruptcy can eliminate these types of judgments, if you were not under the influence of drugs or alcohol at the time of the accident.

What About Other Debts?

Some types of debts cannot be completely discharged unless you surrender the asset. Filing for bankruptcy can also put a stop to certain actions, such as debt collection or eviction processes.

Wage Garnishments

If a creditor is able to obtain a wage garnishment against you, they can seize a significant portion of your weekly earnings. Filing for bankruptcy can put a stop to some types of wage garnishments, giving you relief from hassling creditors while you determine your next steps.

Home & Vehicle Loans

Some types of debt, known as secured debts, have collateral. This can include home mortgages, real estate loans, and vehicle loans. Secured debt can sometimes be discharged in bankruptcy, but it can be complex, so the best course of action is to work with an experienced Gilbert bankruptcy lawyer who can provide guidance for your situation. In many cases, you will need to surrender the collateral in order to obtain the discharge, although you may have other options, such as filing a Chapter 13 bankruptcy.

Title Loans

If you have a title or registration loan on your vehicle, you may be able to have the debt discharged in bankruptcy. However, you may need to surrender your vehicle in order to have the debt discharged. Your attorney can guide you through your options and help you determine how your bankruptcy can provide the maximum benefit for your needs.

Vehicle Repossession Deficiency Balances

If your vehicle has been repossessed, or you surrendered the vehicle because you could not make the payments, you may still be required to pay the deficiency balances on the loan even if you no longer have the vehicle. Repossession deficiency balances may be discharged through bankruptcy.

What Debts Are Not Dischargeable In Bankruptcy?

Some debts cannot be discharged by filing for Gilbert Chapter 7 bankruptcy. However, you may have the option to restructure your debt so that payments become affordable. You may also find that eliminating some debts gives you the financial breathing room to pay off your remaining debts.
Non-dischargeable debts include:

  • Child support payments
  • Alimony payments
  • Student loans (in most situations)
  • Civil or criminal fines
  • State and federal taxes (with some exceptions)

    Let Us Provide Options For Overwhelming Debt

    If you’re behind on payments, being hassled by debt collectors, or wondering about your financial future, get in touch with Gilbert Bankruptcy Lawyers. We have extensive experience assisting clients through the complexities of bankruptcy. Let us help you get the maximum benefit from bankruptcy and guide you through the entire process. Contact us today to schedule your confidential consultation!


    Gilbert Bankruptcy Lawyers
    Office: 480-448-9800

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