Certain debts cannot be discharged in Chapter 7 bankruptcy. These are called non-dischargeable debts, and it doesn't make sense to file for Chapter 7 if your primary goal is to get rid of them. In general, they are:

  • Back child support and alimony
  • Student loans that first became due fewer than seven years ago
  • Court-ordered restitution
  • Income taxes less than three years past due
  • Court judgments for injuries or death to someone arising from your intoxicated driving

Furthermore, the bankruptcy judge can rule any of the following debts nondischargeable if the creditor objects in the bankruptcy court:

  • Debts incurred on the basis of fraud, such as lying on a credit application
  • Debts from willful or malicious injury to another or another's property
  • Debts from larceny (theft), breach of trust or embezzlement
  • Debts you are obligated to pay under a divorce settlement

Chapter 7 Bankruptcy - How Much Property Will You Have to Give Up?

Whether or not you file for Chapter 7 bankruptcy may depend on what property will be taken to pay your creditors - your nonexempt property. In most states, you can keep the following items (this list varies greatly from state to state):

  • A motor vehicle, to a certain value
  • Reasonably needed clothing
  • Reasonably needed household furnishings, goods and appliances
  • Jewelry, to a certain value, and personal effects
  • Life insurance (cash or loan value, or proceeds), to a certain value
  • Pensions and retirement plans
  • Part of the equity in your home
  • Tools of your trade or profession, to a certain value
  • Portion of unpaid but earned wages
  • Public benefits (welfare, Social Security, unemployment compensation) accumulated in a bank account

If you've pledged property as collateral for a loan, the loan is called secured. The most common examples are house and motor vehicle loans. In most cases, you'll either have to surrender the collateral to the creditor or make arrangements to pay for it during or after bankruptcy.