A debtor wanting most of the debts to be forgiven usually seeks to file chapter 7 bankruptcy instead of other types of bankruptcy such as chapter 13. Under the chapter 7 bankruptcy laws, most debts are discharged and most creditors must cease collecting efforts and any legal actions against debtors. However, the chapter 7 bankruptcy laws include many exceptions.



Compliance is key when filing chapter 7 bankruptcy. A debtor must comply with chapter 7 bankruptcy laws in order to not have his or her case rejected, converted or dismissed. To comply with the chapter 7 laws, a debtor often hires a bankruptcy lawyer to help with filing and interpreting the complicated laws.

If the bankruptcy court finds it reasonable to issue a discharge order to release debtors of certain debts, creditors can have a say in the matter by filing complaints against the discharge decision of the court. If the creditors do not object to the discharge, the discharge order is often issued within a few months after the first meeting of creditors. The creditors can also file for more time to object.

Most people who file chapter 7 bankruptcy receive a discharge order however there are many reasons the court may reject the case. For example, if a debtor takes advantage of the chapter 7 bankruptcy laws such as committed a crime, fraudulently transferred assets to deceive the bankruptcy court, sabotaged properties that would be liquidated then the court would reject the case.

Not every type of debts can be totally discharged. The chapter 7 bankruptcy laws provide secured creditors the rights to seize the properties even when the discharge has been granted. Unsecured creditors on the other hand do not have any rights after the discharge. If a debtor wishes to keep some assets that were used as collaterals for the debts, he or she may reaffirm the debts in order to keep the properties after bankruptcy.

Once a discharge of debts has been granted to the chapter 7 filer, creditors of discharged debts may not continue to harass the debtor in order to collect the debts. Creditors that sell off the debts to collection agencies cannot themselves contact the debtors to collect the debt. The collection agency also cannot keep trying to collect from the debtor.

While many debts are discharged under the chapter 7 bankruptcy laws, many debts are not. If a debtor's main debts are those exempt from discharge, then he or she will still owe the debts after the case is closed. Examples of debts not discharged according to the chapter 7 bankruptcy laws are alimony, child support, taxes, and guaranteed loans. There are many more exceptions.