DAY 10 — What Debts Are Eliminated in Chapter 7 Bankruptcy?
Week: Week 2: Decision
Intent: High-Intent | Chapter 7 Discharge
Chapter 7 eliminates most unsecured debts. Learn exactly which debts are discharged, which survive bankruptcy, and what to expect after filing.
Chapter 7 bankruptcy eliminates most unsecured debts — credit cards, medical bills, personal loans, old utility bills, and more. These debts are permanently wiped out. You no longer owe them and creditors can never collect on them again.
Debts Eliminated in Chapter 7 (Dischargeable)
-
Credit card debt — fully discharged
-
Medical bills — fully discharged
-
Personal loans and payday loans — fully discharged
-
Old utility balances — discharged
-
Judgments from unsecured debts — discharged
-
Some older income tax debts (meeting specific age/filing requirements)
-
Lease obligations for surrendered property
-
Deficiency balances after repossession or foreclosure
Debts That Survive Chapter 7 (Non-Dischargeable)
-
Student loans (dischargeable only in rare hardship cases)
-
Child support and alimony — never discharged
-
Recent income tax debts (generally within 3 years)
-
Criminal fines and restitution
-
Debts from fraud or intentional wrongdoing
-
DUI-related injury/death judgments
-
Recent government-funded overpayments (some exceptions)
What About Secured Debts?
Chapter 7 eliminates your personal obligation on secured debts (like a mortgage or car loan), but doesn't eliminate the lien. If you want to keep the property, you must reaffirm the debt or continue paying. If you surrender it, the debt is gone.
How Long Does the Process Take?
Chapter 7 is fast. From filing to discharge typically takes 3–5 months in Maryland. There's a meeting of creditors (341 meeting) about 30 days after filing, and discharge usually follows 60 days later.
Maryland-Specific Insight
Maryland has state-specific exemptions that protect certain property during bankruptcy — including a homestead exemption, vehicle exemption, and retirement account protections. An attorney ensures your exemptions are maximized before you file.
Reality Check
Chapter 7 gives you a genuine fresh start. The debts aren't deferred or reduced — they're eliminated. For people drowning in credit card or medical debt, it's one of the most powerful legal tools available.
Related Questions
→ What Debts Cannot Be Discharged?
→ Do I Qualify for Chapter 7 Bankruptcy?
→ Will I Lose My House or Car in Chapter 7?
→ Does Bankruptcy Ruin Your Credit Forever?
