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Can I Discharge My Debt Through Chapter 7 Bankruptcy?
Frank Malara • April 16, 2015

You may be wondering, Can I Discharge My Debt Through Chapter 7 Bankruptcy?

Are you considering filing for chapter 7 bankruptcy? If so, you aren’t alone, with over 619,000 filings reported in 2014. This decision is fueled by many personal circumstances, such as loss of employment, being underwater on a mortgage, or the most common — medical bills.

In fact, 62 percent of consumer bankruptcies are caused by medical bills, with the American Journal of Medicine finding that the majority of people who file bankruptcy are middle-class, well-educated homeowners.

But before making the decision to file, you likely have many questions, such as “Will chapter 7 bankruptcy truly eliminate my debts?”

Discharging Debt

For the majority of people, the goal of filing for chapter 7 bankruptcy is to eliminate debt. And in many cases, this form of bankruptcy can discharge a variety of debts, such as medical bills, back rent and utility bills, along with unsecured debts — such as credit cards — and even secured debts, like your mortgage (as long as you surrender the property).

However, there are some cases where discharge is denied, such as if any of the acts listed below have been committed:

  • Transferring the property within one year of the bankruptcy with actual intent to hinder, delay or defraud.
  • Making a false oath in connection with the bankruptcy.
  • Receiving a discharge in an earlier case commenced within eight years of the instance case.
  • Receiving a Chapter 12 or Chapter 13 discharge in an earlier case commenced within six years of the instance case if creditors did not receive a 70 percent payment in a good-faith case (or a 100 percent payout otherwise).

Other Debts

In addition to the situations listed above, it’s important to know that some other debts may survive bankruptcy. Take, for example, child support, alimony payments and, in some situations, student loans or taxes. And even if a debtor receives a general discharge, some of the debts listed below may be exempt from discharge, including:

  • A debt incurred based on a fraud other than with respect to the debtor’s financial condition.
  • A debt incurred based on a false written statement of the debtor’s financial condition.
  • A debt that is not scheduled.
  • A debt incurred by fraud or defalcation while acting in a fiduciary capacity or through embezzlement or larceny.
  • A debt caused by the debtor’s willful and malicious injury.

 

Regardless of your situation, if you have questions about chapter 7 bankruptcy – we can help. Filing for chapter 7 bankruptcy is a major financial decision, and we understand that having the facts upfront is essential. For more information, simply call 914-946-2889 today.

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