What debts can be cleared in a Chapter 7?

UPDATED: Jan 20, 2011

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What debts can be cleared in a Chapter 7?

I lost everything due to the economic crash. I moved from IL to TX 16 months ago. My outstanding debt in was $500,000 before I moved. I make $50,000 a year and pay $1200 a month in child support. Can I file and be cleared?

Asked on January 20, 2011 under Bankruptcy Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Bankruptcy can be used to discharge, or extinguish, most forms of debt. There are some exceptions, however, and child support is one of them--you can't use bankruptcy to discharge child support obligations (it's *possible* you could have family court modify them with a sufficient showing of hardship, however). Nor can you use bankruptcy to eliminate alimony debts; student loan debts (except in VERY severe circumstances); tax debts to the government; or  amounts owed for judgments against you in lawsuits for DUI/DWI. Certain forms of criminal restitution also cannot be discharged.

If any debts are secured (e.g. a mortgage, a car loan), the lender can still repossess or foreclose, though at least you wouldn't owe any balance remaining after the repossession or foreclosure.

Unsecured debts, including credit card debts, unsecured loans, and medical bills, can be discharged.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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