What types of debts can be discharged through Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common personal bankruptcy filing in Washington. It offers individuals the ability to eliminate unsecured debt, commonly referred to as dischargeable debt. These types of debts are those not associated with collateral, such as loans, credit cards, medical bills, personal loans, utility bills, and certain types of taxes. Dischargeable debt does not include student loans, alimony, child support, most taxes, or fines and penalties imposed by government agencies. Chapter 7 also allows people to make payment arrangements on secured debt, such as car loans and mortgages in order to protect their homes and vehicles. The purpose of Chapter 7 bankruptcy is to provide individuals with a fresh financial start. Once the debts are discharged, the person will no longer be responsible for paying them or the associated late fees, interest, or other penalties. In some cases, creditors may not be able to pursue collection activities, making it easier for debtors to rebuild their credit. It is important to note that although Chapter 7 may provide a fresh start, it still remains on the debtor’s record for 10 years, and may have a negative impact on the individual’s ability to obtain new credit.

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What types of debts can be discharged through Chapter 7 Bankruptcy?

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