Discharging Debt in Chapter 7 Bankruptcy

Which Debts Can Be Discharged and Which Cannot?

When you’re considering bankruptcy options, the ability to permanently discharge certain debts in Chapter 7 can be very appealing. To qualify for Chapter 7, you must pass the means test by demonstrating to the bankruptcy court that you lack the resources to repay your creditors over a three-to-five-year period. Assuming you meet the eligibility requirements for Chapter 7, you are still limited as to what you can and cannot discharge.

The Timing Requirements for the Discharge of Debt

Under the bankruptcy laws, you can discharge only debt you incurred before filing for bankruptcy. Any new obligations entered into after filing do not qualify for discharge.

The Types of Debt that Can and Cannot Be Discharged

Bankruptcy law prohibits or limits the circumstances under which certain types of debt can be discharged. Family law obligations, such as child support or alimony, are specifically excluded from eligibility for discharge. Certain tax arrearages and student loan payments may be discharged only in rare circumstances. Other discharge limitations apply to fines or penalties owed to government agencies, criminal restitution orders, some attorney fees, personal injury obligations related to drunk-driving accidents, and condo or co-op housing fees.

Most other types of debt can be discharged, including the following:

• Credit card bills
• Claims from collection agencies
• Personal loans
• Medical expenses
• Repo deficiency claims
• Utility bills
• Most civil court judgments
• Social security overpayments

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we work closely with people who suffer personal injury in New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation (on selected cases). We are currently available by phone, text message, or videoconference. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.

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