Chapter 7 Bankruptcy FAQ
Will all of my unsecured debts be wiped out in Chapter 7 bankruptcy?
3. Will all of my unsecured debts be wiped out in Chapter 7 bankruptcy?
Chapter 7 bankruptcy wipes out most types of unsecured debt. Unsecured debts are those debts which are not tied to property -- like a home or car. Those unsecured debts wiped out by Chapter 7 bankruptcy include credit card debt, medical bills, and gasoline card debt.
However, some unsecured debt is nondischargeable in Chapter 7 bankruptcy -- meaning it is not wiped out. Nondischargeable debts include those for child and spousal support, student loans (except in very limited circumstances), recent debts for luxuries, debts incurred on the basis of fraud (such as lying on a credit application or writing a bad check), and tax debts first due within the previous three years. To learn more about which debts cannot be wiped out in Chapter 7 bankruptcy, see Nolo's articles What Bankruptcy Can and Cannot Do and When Chapter 7 Bankruptcy Isn't the Right Choice.