Are All Debts Discharged in Chapter 7?

You may have heard that you can extinguish all of your debt completely in one fell swoop if you file a Chapter 7 bankruptcy. In many cases, most of your debt can be discharged through a successful Chapter 7 filing, and all debts could potentially be discharged depending on the nature of the encumbrances. However, there are some debts that can never be discharged through bankruptcy.


For the most part, tax debts are not dischargeable. Tax liens and property taxes that have been assessed within a year of your bankruptcy filing date cannot be discharged.  If you are an employer, taxes that you are required to pay on behalf of your employees, like payroll taxes, can’t be discharged. Plus, sales taxes that have been paid to you by customers that you are supposed to pass along the government are not dischargeable. Though taxes are usually non-dischargeable, when very specific circumstances exist, it is possible to discharge some income tax debts.


If you are required to pay spousal support or alimony, the bankruptcy filing will do nothing to shield you from your responsibilities. The same thing is true for child support or any debts that you owe to your spouse that came about due to a dissolution of marriage. Any legal fees that you may have incurred during a child custody or child support matter would not be dischargeable. If you have financial obligations as a result of a judgment against you after a drunk driving accident that caused an injury, the debt will not be discharged in bankruptcy. You can see a complete list of non-dischargeable debts if you visit this page on the Cornell University Law School website.


The debts that we have been looking at simply cannot be discharged, but there can also be procedural barriers that prevent discharges when they could have otherwise been granted. You have to fill out detailed financial disclosure forms when you file for bankruptcy, and if anything is done incorrectly or dishonestly, discharges can be denied. You also have to complete a debtor education course to qualify for a discharge.


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A ready legal resource is just a phone call away if you would like to explore the debt relief avenues that may be available to you. We have locations in many metropolitan areas in Oregon, including Albany, Medford, and Eugene, and we also have offices that serve the Tri-Cities and Vancouver in Washington. To schedule an appointment, send us a message through the contact page on this website.


Does Bankruptcy Wipe Out Lawsuit Judgements?

If you fall behind on a debt, the creditor can file a lawsuit in an effort to get a judgment against you.  A judgment allows a creditor to garnish wages and bank account and it also allows them to put a lien on your home.  Many people who are in this situation consider the possibility of a bankruptcy filing. When you file for bankruptcy, you get an automatic stay immediately. This prohibits creditors from trying to collect on their debts while the stay is in place, and a pending lawsuit would be stalled. Even if there is an existing judgment, if the debt is dischargeable, bankruptcy would in fact wipe it away when the discharge is granted, so you will be free going forward.

Dischargeable debts are typically unsecured debts like credit card balances, certain types of personal loans, and unpaid health care bills. There are other types of debts that cannot be discharged. For example, the laws are very strict when it comes to family law matters. Child support payments are never going to be to be discharged through bankruptcy, and spousal support is also a non-dischargeable debt.

Many people struggle with student loan debt and unfortunately this type of debt cannot be discharged through bankruptcy (with limited exceptions). If you have a judgment against you due to an injury or death that was caused by an instance of drunk driving, your liability will not go away if you file for bankruptcy. Plus, if you owe any type of debts to the government, like back taxes or fines, they would not be discharged through a bankruptcy filing. These are all debts that are automatically non-dischargeable, but a creditor can file an objection to a discharge on a debt that is not always non-dischargeable when certain circumstances exist.

Schedule a Complimentary Case Evaluation Today!

There is no reason to sit around wringing your hands when you reach the conclusion that your debt has become overwhelming. Bankruptcy can be the solution that provides you with a new lease on life so that you can move forward and start to rebuild your credit history. We have an office that serves the Tri-Cities in Washington, and we have a Vancouver location. Our firm also assists clients throughout the state of Oregon, and we offer free, no obligation consultations. Give us a call right now at 800-682-9568 and we will to be glad to schedule an appointment that fits into your schedule.