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What Debts Can Be Discharged by Bankruptcy

The biggest benefit that comes from bankruptcy is the ability to gain a fresh start from a bleak financial situation. One of the biggest myths about bankruptcy is that it doesn’t have a positive outcome, which is absolutely not the case. Successful bankruptcies allow for a discharge or release of some or all of your debts permanently, getting them off your back for good. Below you’ll find a guide to exactly which debts can be discharged under Chapter 7 and Chapter 13 bankruptcies.

Chapter 7

Chapter 7 bankruptcies allow for the discharge of many of the most common debts. It is usually meant for individuals who have a wide variety of past-due obligations who wish to wipe them all out in one fell swoop.

After the 4-6 months that it takes in order to complete a Chapter 7 filing, a discharge will then be issued. Here is a list of debts that can be discharged under Chapter 7:

  • Credit card debt
  • Medical bills
  • Personal loans
  • Utility bills
  • Past obligations under leases and contracts
  • Lawsuit judgments against you
  • Promissory notes

Though there are many types of debts that can be forgiven under Chapter 7, there are debts that are considered non-dischargeable. Here are some examples:

  • Alimony/child support
  • Student loans
  • Certain past-due taxes
  • Debts for personal injury/injury to someone else sustained by driving under the influence
  • Attorney fees in child custody/support cases

Chapter 13

While Chapter 13 mainly focuses on reorganizing your debt to pay it off over the lifespan of the bankruptcy, there are certain debts that can be discharged. There are some cases, however, in which a filer may need to convert their case to a Chapter 7 in order to find the relief they are looking for.

Here is a list of debts that can only be discharged by a Chapter 13 bankruptcy:

  • Marital debts from divorce (excluding child support/alimony)
  • Certain court fees
  • Condo, HOA, and coop fees
  • Retirement plan loan debts
  • Debts that were unable to be discharged by a previous bankruptcy

Contact our Arkansas Bankruptcy Team Today

We understand the impact that a stressful financial situation can have. We provide a compassionate and personalized approach to make sure we help you find the path you are looking for to get to financial freedom.

If you are considering filing for bankruptcy, or simply need more information, feel free to contact us today through our website or give us a call at (479) 888-2039 for your free consultation!