What Debts Can I Discharge in Chapter 7

//What Debts Can I Discharge in Chapter 7
What Debts Can I Discharge in Chapter 72018-04-24T00:06:13+00:00

Wipe Out Debt With Chapter 7

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.

Type of Debts wiped out by Chapter 7 Bankruptcy Oregon and Washington:

  • Credit cards
  • Personal loans
  • Certain tax debts
  • Parking tickets
  • Store cards
  • Checking account overdrafts
  • Medical and dental bills
  • Social Security and unemployment over payments

Exempt Property

In Oregon, a Chapter 7 a trustee takes possession of your property that is not considered “exempt.” Common property types that you can keep in when you file for Chapter 7 bankruptcy Oregon:

  • Bank accounts with a total value of up to $400
  • Clothing and jewelry with a value of up to $3,600
  • Homes with a total equity of up to $33,000
  • Automobiles with total equity of up to $3,400
  • Household furniture with a value of up to $3, 000
  • Retirement accounts from a current or previous employer

Non-Exempt Property

In Washington, a Chapter 7 in Washington a trustee takes possession of your property that is not considered “exempt.” Common property types that you can keep in Washington when you file for Chapter 7 bankruptcy are:

  • Personal Property of any kind with a value of up to $2000 or, if Debtor does not own a home, up to a value of $9,000
  • Household furniture with a value of up to $2,700
  • Retirement accounts from a current or previous employer
  • Automobiles with total equity of up to $2,500 or $5,000 for married couples
  • Jewelry with a value of up to $1,000
  • Homes with a total equity of up to $40,000

Debt That Cannot Be Discharged in Bankruptcy

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

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Written by Tom McAvity, Esq., bankruptcy lawyer
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