When you file for bankruptcy, not all of your debt automatically disappears. The legal term for wiping out a debt through bankruptcy is discharge — and whether a specific debt qualifies depends on what type it is, which chapter of bankruptcy you file, and sometimes the specific circumstances around how the debt was incurred. Understanding this distinction is one of the more useful things to know before you sit down with an attorney.
What “discharge” actually means
A discharged debt is a debt you are legally released from. Once a debt is discharged, the creditor can no longer legally pursue you for payment — no collection calls, no lawsuits, no wage garnishments. The obligation is gone.
This is different from debts that are restructured (as in a Chapter 13 repayment plan) or resolved through asset liquidation. Discharge is a legal elimination of the obligation itself.
Not all debts can be discharged. Congress has defined specific categories of debt that survive bankruptcy — meaning you still owe them even after your case closes.
Debts that are typically dischargeable
The following types of debt are generally eligible for discharge in a personal bankruptcy case:
- Credit card balances — unsecured consumer debt is the most straightforward category for discharge
- Medical bills — treated as unsecured debt, the same as credit cards (see our guide on does bankruptcy clear medical debt)
- Personal loans — unsecured loans from banks, credit unions, or online lenders
- Utility arrears — past-due balances on utility accounts
- Some older tax debt — federal income taxes that are at least three years old and meet additional specific criteria may be dischargeable; this is complex and worth asking an attorney about directly
- Certain lease obligations — unpaid rent or early termination fees, in some cases
- Some civil judgment debt — money judgments that don’t stem from fraud or intentional wrongdoing
The common thread among dischargeable debts is that they’re typically unsecured — no collateral is tied to them — and they don’t fall into one of the protected categories below.
Debts that are typically not dischargeable
Federal law protects certain categories of debt from being wiped out in bankruptcy. These include:
- Student loans — both federal and private student loans are non-dischargeable in almost all cases; a separate legal process called an “undue hardship” proceeding is required, and courts grant it rarely
- Child support and alimony — domestic support obligations are entirely exempt from discharge
- Most tax debt — recent income taxes (generally within the last three years), payroll taxes, and tax penalties are typically protected
- Criminal fines and restitution — money owed as part of a criminal judgment cannot be discharged
- Debts from fraud — if a creditor can demonstrate a debt was incurred through fraud, false representation, or intentional deception, that debt survives
- DUI-related personal injury debt — damages from an accident caused while driving under the influence generally cannot be discharged
- Debts from willful injury — intentional harm resulting in financial liability is generally non-dischargeable
Does it matter which chapter you file?
In most cases, the list of non-dischargeable debts is similar under both Chapter 7 and Chapter 13. However, Chapter 13 provides some additional tools for managing certain debts that Chapter 7 does not.
For example, Chapter 13 allows you to catch up on mortgage arrears over time, and it can handle some obligations — like certain property settlement debt from a divorce — differently than Chapter 7. Some debts that can’t be fully discharged under Chapter 7 may be structured more favorably in a Chapter 13 repayment plan.
That distinction matters if a meaningful portion of your debt falls outside the standard dischargeable categories. Understanding how the two chapters differ is a good place to start before speaking with an attorney.
Why this matters before you meet with an attorney
Knowing what’s on your debt list — and which category each debt falls into — is some of the most useful preparation you can do before your first attorney consultation. Attorneys will want to understand not just how much you owe, but what you owe. The composition of your debt significantly shapes which options are available and what the outcome is likely to look like.
If most of your debt is dischargeable unsecured debt, bankruptcy may offer a relatively clear path forward. If a large share is non-dischargeable — student loans and recent tax debt, for example — the picture becomes more complicated, and an attorney can help you think through whether the tradeoffs still make sense.
NorthKey is designed to help you build that picture before you walk into that conversation: mapping your debt by type, getting your documents organized, and understanding what professionals will need from you. If you’re not sure where to start, the Fit Check is a good first step.