What Debts Can be Discharged in Bankruptcy?

Not all debts can be discharged in bankruptcy.  Bankruptcy does not discharge most liens, like a home mortgage or automobile lien. So if you want to keep that property in a chapter 7, you must current on the loan and be able to afford the regular payments.  The creditor will, in most cases, permit you to keep the home or automobile if you remain liable for the full debt.  This is called reaffirming the debt.  You may also pay the creditor the value of the property to keep it in a chapter 7.  This is called a redemption.  Certain liens, such as those on household goods, may be avoided.

Chapter 13 also permits you to keep property in a bankruptcy, but is more complicated.

There are other types of unsecured debt which cannot be discharged. Student loans, certain federal taxes, criminal restitution, and child or spousal support obligations are some examples.

This short video discuss the limits of bankruptcy in more detail: