What Debts Are Dischargeable in Bankruptcy? An Arizona Guide
Quick Answer
A dischargeable debt is a debt that bankruptcy can legally eliminate, meaning you are no longer personally required to pay it. Credit card balances, medical bills, personal loans, and many other unsecured debts are commonly dischargeable. Certain debts, including child support, most student loans, many tax claims, and debts from drunk-driving injuries, generally are not. Which debts qualify depends on the debt type and the chapter filed. Thomas Law PLLC attorney Fred Thomas reviews each situation individually for Phoenix, Scottsdale, and Maricopa County clients, and the first consultation is free.
Introduction
When people search for "dischargeable debt," they usually want one answer: will bankruptcy get rid of what I owe? The honest answer is that it depends on what the debt is, and that most people are surprised in both directions. Some debts they assumed were safe turn out to be dischargeable, and a few they hoped would disappear generally are not.
This guide from Thomas Law PLLC in Scottsdale explains what "discharge" means, which types of debt are commonly dischargeable, which generally are not, and how Chapter 7 and Chapter 13 differ. It is general information, not advice about a specific case.
What Does "Discharge" Mean in Bankruptcy?
A bankruptcy discharge is a court order releasing you from personal liability for certain debts. Once a debt is discharged, the creditor can no longer collect it from you, which includes calls, letters, lawsuits, and wage garnishment on that debt. A discharge eliminates your personal obligation, but it does not automatically remove a lien on property. A mortgage lender, for example, may keep its right to the house even when the personal debt is discharged, which is why secured debts are treated differently.
Which Debts Are Commonly Dischargeable?
Many unsecured debts, meaning debts not backed by collateral, can be discharged. Common examples include:
- Credit card balances
- Medical bills
- Personal loans and many payday loans
- Past-due utility and phone bills
- Collection accounts and many deficiency balances after a repossession or foreclosure
- Certain older tax debts, depending on the type of tax and its age
- Judgments from most ordinary civil lawsuits, other than those covered by the exceptions below
Whether a particular debt qualifies depends on how it arose and on the chapter filed, which is why individual review matters more than any general list.
Which Debts Are Generally Not Dischargeable?
Federal bankruptcy law (11 U.S.C. § 523(a)) lists categories of debt that generally survive bankruptcy. The most common:
- Domestic support obligations, such as child support and alimony
- Most government-funded or guaranteed student loans, which generally survive unless a court finds a specific hardship standard is met
- Certain tax claims, including many recent income taxes
- Debts for personal injury or death caused by driving while intoxicated
- Debts for willful and malicious injury to a person
- Fines, penalties, and restitution owed to a government unit
- Debts you left off your bankruptcy paperwork, in some circumstances
- Debts to certain tax-advantaged retirement plans
- Certain condominium or cooperative housing fees
A note on fraud-based debts. Debts tied to fraud or similar misconduct (11 U.S.C. § 523(a)(2), (4), and (6)) are not automatically excluded from discharge. The creditor must ask the bankruptcy court to rule that the debt is nondischargeable, and if no one does, the debt can still be discharged.
Secured Debts: Mortgages and Car Loans
A secured debt is tied to collateral. Bankruptcy can discharge your personal liability on a mortgage or car loan, but the lender generally keeps its lien and can still take the property if payments stop. That is why the question for secured debt is usually not "can I discharge it?" but "can I keep the property?" In Arizona, that depends on exemptions such as the homestead exemption (A.R.S. § 33-1101) and vehicle exemption (A.R.S. § 33-1125), and on which chapter fits. Chapter 13 can also help someone catch up on missed payments over time while keeping the property.
Chapter 7 vs. Chapter 13: Does the Chapter Change What Is Dischargeable?
Yes, in some ways.
- Chapter 7 is a liquidation-style bankruptcy that can discharge qualifying unsecured debt, typically within a few months, subject to a means test based on income.
- Chapter 13 reorganizes qualifying debt into a court-approved repayment plan lasting three to five years. It has a shorter list of exceptions to discharge than Chapter 7. For example, debts for willful and malicious injury to property, debts incurred to pay nondischargeable taxes, and debts arising from a divorce or separation property settlement can be discharged in Chapter 13 even though they generally cannot in Chapter 7.
Which chapter fits depends on income, assets, the kinds of debt involved, and what you are trying to protect.
How Long Does Bankruptcy Stay on Your Credit Report?
Under the Fair Credit Reporting Act, a Chapter 7 bankruptcy generally stays on a credit report for 10 years from the filing date, and a Chapter 13 bankruptcy for 7 years. Many people begin rebuilding credit well before those periods end.
Does Filing Bankruptcy Stop Collection Calls and Garnishment?
Generally, yes. Filing triggers an automatic stay (11 U.S.C. § 362) that stops most collection activity while the case proceeds, including wage garnishment, collection calls, and most creditor lawsuits. Some obligations, such as certain child support and tax matters, are exceptions.
CTA: Not sure which of your debts qualify? Call Thomas Law PLLC at (480) 582-1549 for a free, confidential consultation with attorney Fred Thomas.
Frequently Asked Questions
What debts are dischargeable in bankruptcy? Many unsecured debts, including credit card balances, medical bills, personal loans, past-due utility bills, collection accounts, and certain older tax debts, can be discharged. Whether a specific debt qualifies depends on its type, its age, and the chapter filed.
What debts cannot be discharged in bankruptcy? Debts that generally survive bankruptcy include child support and alimony, most government-funded or guaranteed student loans, many tax claims, debts for injuries caused by drunk driving, fines and penalties owed to government units, and certain other categories listed in 11 U.S.C. § 523(a).
Can credit card debt be discharged in bankruptcy? Yes, in most cases. Credit card balances are typically unsecured debt, which bankruptcy can discharge, although recent luxury purchases or cash advances made shortly before filing can draw scrutiny from creditors.
Can medical bills be discharged in bankruptcy? Yes. Medical bills are generally unsecured debt and are commonly discharged in both Chapter 7 and Chapter 13.
Are student loans dischargeable in bankruptcy? Most government-funded or guaranteed student loans are generally not dischargeable unless a court finds a specific hardship standard is met, which is difficult to prove. Student loans are one of the most important debt types to review with an attorney before filing.
Are taxes dischargeable in bankruptcy? Some older income tax debts may be dischargeable, but many tax claims are not, and the answer depends on the type of tax and its age. Tax debt should be reviewed individually.
Is there a free consultation for bankruptcy at Thomas Law PLLC? Yes. The initial bankruptcy consultation with attorney Fred Thomas is free and confidential, and there is no obligation to move forward.
Does Thomas Law PLLC handle bankruptcy for clients in Phoenix and Scottsdale? Yes. Fred Thomas represents Chapter 7 and Chapter 13 clients throughout Phoenix, Scottsdale, Mesa, Tempe, and the rest of Maricopa County.
Get a Straight Answer About Your Debts, Call (480) 582-1549
About the Attorney
Fred Thomas is the founding attorney of Thomas Law PLLC in Scottsdale, Arizona. He worked as an insurance adjuster before practicing law, earned his B.S. from Arizona State University and his J.D. from McGeorge School of Law, and has spent over two decades practicing law. Every bankruptcy matter is handled directly by Fred, with no case manager between you and your attorney.
Thomas Law PLLC · 14555 N Scottsdale Rd #320, Scottsdale, AZ 85254 · (480) 582-1549
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This article is for general informational purposes only and is not legal advice. Laws and exemption amounts change, and every situation is different. Reading this article or contacting Thomas Law PLLC does not create an attorney-client relationship. For advice about your situation, speak with a licensed attorney.