What is a Ch 7 Bankruptcy Discharge?

Chapter 7 Bankruptcy Debt

What is a Ch 7 Bankruptcy Discharge?

A Chapter 7 Bankruptcy discharge is a process where the debtor is released from personal liability for specified types of debts.

What does this mean?

The debtor is no longer legally required to pay any debts that have been discharged. The debt discharge is an order declaring that the creditors can no longer attempt to collect on any debts that have been discharged through the bankruptcy proceedings. This means, phone calls, letters, and even e-mails with the debtor are prohibited.

What debts are not dischargeable in Chapter 7?

With a Ch 7 Bankruptcy all debts may be discharged, except those specifically labeled by law. What is listed below is the most common types of debts that are not dischargeable under Chapter 7:

  • Debts for intentional injury to the person or property of another
  • Tax debts that have been assessed within 3 years of filing
  • Debts that were or could have been listed in a previous bankruptcy case, that were not discharged
  • Debts for domestic support including: Alimony, Support, Property Settlement Debts
  • Debts obtained by fraudulent activities
  • Debts for student loans, unless a court finds that not discharging the debt would impose an undue hardship on the debtor (if it creates a risk to a person’s livelihood)
  • Debts that have not been listed on the debtor’s Chapter 7 forms
  • Debts that have been received for fines or penalties
  • Debts for personal injury or death caused by the debtor’s operation of a motor vehicle while intoxicated

How do you receive a Ch 7 Bankruptcy discharge?

Before you can begin to think about discharging your debts under Chapter 7 you must determine if you are eligible. Eligibility is determined based on a number of factors, such as: your Ch 7 means test results, the median income in your state vs. what you make, completion of credit counseling course and the types of debts you are attempting to remove.

As mentioned, some types of debts are not dischargeable under Chapter 7 by law. These restricted debt types can not be removed from the debtor, and will still need to be settled regardless of the conclusion of your bankruptcy case.

Filing for Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy is a real solution for individuals looking to regain control of their financial situation. Unfortunately, not everyone is eligible to file.

If you have questions about your Chapter 7 eligibility, the Ch 7 means test, or any other bankruptcy types available, fill out our free evaluation form to speak with a Los Angeles Bankruptcy Attorney about your bankruptcy options.