Chapter 7: Wiping out debts

Chapter 7 Bankruptcy is called a “liquidation” bankruptcy. Chapter 7 bankruptcy is designed to help people who are unable to pay their existing debts. The purpose of filing a Chapter 7 case is to obtain a discharge
of your existing debts. When you file for Chapter 7 bankruptcy you can wipe out debt from:
  • Credit cards
  • Personal loans
  • Certain tax debts
  • Parking tickets
  • Store cards
  • Checking account overdrafts
  • Medical and dental bills
  • Social Security and unemployment overpayments
Unfortunately, not every debt can be wiped out. Debts that are not wiped out include:
  • Most taxes
  • Debts obtained through fraud or deception
  • Most student loans
  • Child support and alimony
  • Court-ordered fines and criminal restitution
  • Debts for personal injuries caused by driving while intoxicated or taking