What Debts Are Discharged In Chapter 7 Bankruptcy

Most debts are discharged in Chapter 7 bankruptcy.  Credit cards, unsecured personal loans, medical debt, car repossession deficiencies are examples of the types of debts that are generally dischargeable.

What Debts are not Discharged in Chapter 7 bankruptcy?

Not all debts are discharged in Chapter 7 bankruptcy.  Student loans, recent taxes (within the last 3 years), and most divorce-related debts are a few examples.


Chapter 7 bankruptcy stays on your credit report for ten years from the date of filing.  Most people think that a bankruptcy destroys your credit for the whole ten years, but that is not correct.  Clients who work with our office are very surprised to learn that filing a bankruptcy will actually increase their current credit score (sometimes as much as 80 to 120 points).  This is because most clients already have a lower credit score based on their significant history of late and/or missed payments. However, the small percentage of clients who come to us with exceptionally high credit scores need to be aware that, in their situation, filing a bankruptcy will place a moderate negative mark on their credit for the ten-year period.  As time passes the weight given to the bankruptcy by the credit bureaus gets lighter, the score improves, and after ten years it’s gone completely.

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Assets in Chapter 7 bankruptcy:

Chapter 7 bankruptcy is a liquidation.  What this means is that, in theory at least, you give up all of your non-exempt property for a discharge of your debts. In reality, most people have very little property, so they do not have to give up any of it in Chapter 7.  Even if you do have a lot of property (cars, jewelry, electronics, furniture) Massachusetts is on of the states that has a very good list of exemptions and our office is extremely successful at making sure that all of our clients’ property is exempt and therefore safe from being taken by the Chapter 7 Trustee.

If you do have assets that are not exempt and want to keep them, you cannot do so in a Chapter 7 and will need to file a Chapter 13.  You can learn what will happen to your assets in a Chapter 7 bankruptcy by calling us and answering all of our questions honestly.


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