What Kinds of Debts are Discharged in a Chapter 7 Bankruptcy?

Bankruptcy can be a solution for solving financial problems faced by individuals and businesses.   It is sometimes the only workaround to the debt problem. Financial experts recommend considering this option as a last resort to ease the debt burden.

In a Chapter 7 bankruptcy, a lawyer will represent you in the court to discharge debts. Debts that are discharged no longer require any payment. This will ease the burden of having too many debts that you cannot repay.

An important consideration when choosing Chapter 7 bankruptcy is the kinds of debts that will be discharged. Here you will learn about the debts that can be discharged when you file.

Debts that Can be Discharged in a Chapter 7 Bankruptcy

You can discharge certain pre-petition debts when you file for the bankruptcy protection. Pre-petition debts are those obligations that have incurred before the filing date. Some of the pre-petition debts that you can discharge include the following.

  • Medical bills
  • Credit card debt
  • Personal loans including car, truck or other vehicle loans
  • Promissory notes
  • Lines of credit
  • Mortgages including second and third mortgages
  • Certain lawsuit judgments
  • Obligations under contracts and leases owed by a sole proprietor including residential and commercial property leases
  • Unsecured business debts owed by a sole proprietor to consultants, suppliers, and professionals such as architects or accountants.

All the above types of debts are dischargeable under the Chapter 7. Once you file the protection plan you may be able to discharge these loans. It’s advisable to contact a professional bankruptcy lawyer who can help you discharge maximum loan amount.

Debts Not Dischargeable Under Chapter 7 Bankruptcy

You should also know about the loans that can’t be discharged when you file for the Chapter 7 bankruptcy plan. Post-petition loans that you rack up after filing the paperwork are not dischargeable. In addition, certain financial obligations can’t be discharged whether you obtain them prior to or after submitting the paperwork for initial bankruptcy, such as:

  • Alimony
  • Child support
  • Student loans (unless there is extreme hardship)
  • Fines and penalties owned to government
  • Payment for driving under the influence
  • Divorce settlement agreements
  • Loan from pension plans
  • Personal injury judgments

You should discuss your options with a professional bankruptcy law attorney.

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Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

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