Unsecured Debts

• Generally speaking, you can discharge all of your unsecured debts in a Chapter 7 bankruptcy case. An unsecured debt is one that is not collateralized or "secured" by an asset that your creditor can use to exact payment. Since credit card debt, general loans and medical debt are not secured by any hard assets, they qualify as unsecured debt that you can discharge in Chapter 7. You can also discharge personal loans from family, friends or other individuals. Once you receive your bankruptcy discharge, you are free to repay any debt you desire, although you are not legally bound to do so.
  
  

Secured Debts

• When you file your bankruptcy petition, you must include all of your debts, even your secured debts, on your bankruptcy schedules. For the most part, you can discharge even secured debts in a Chapter 7 case. However, although the bankruptcy discharge eliminates your obligation to pay your secured debts, your creditors still maintain a secured lien over your property. What this effectively means is that while you do not have to pay your secured debts, your creditors can still seize your property for nonpayment.
  
  

Exempt Property

• Protection of property is an important aspect of a Chapter 7 bankruptcy, as it is known as the "liquidation" chapter of bankruptcy. If you own expensive assets and property, you may lose them in a Chapter 7 case. To save your property, you must include it on your bankruptcy petition and exempt it using federal or state bankruptcy laws. If your property is worth less than your allowable exemptions, you can keep it. However, if you fail to include all property in your bankruptcy case, you are committing the crime of bankruptcy fraud. Whether or not your property is exempt, you must show the bankruptcy court what you own.
  
  

Non-Dischargeable Debts

• Some debts will survive your Chapter 7 case and are known as "non-dischargeable debts." You must include even non-dischargeable debts on your bankruptcy petition. Usually, non-dischargeable debts have some type of social aspect to them, such as alimony, child support or accident claims. Most back taxes are non-dischargeable in bankruptcy as well. The courts define 19 types of debt as non-dischargeable.