In a bankruptcy petition filed under Chapter 7, a debtor is seeking to obtain a discharge of outstanding debt. The discharge serves as a permanent injunction against otherwise potential collection action for debt incurred prior to the bankruptcy. In essence, a Chapter 7 bankruptcy discharge allows a debtor to proceed forward without financial turmoil, thereby providing the debtor an opportunity for a fresh start.
Most debts are dischargeable, such as credit cards, bank loans, court judgments and medical bills. Debt categorized by the bankruptcy law as non-dischargeable includes certain types of tax debt, most student loans, government fines, restitution for outstanding child and spousal support, and debts incurred from criminal or fraudulent conduct.
There are now also income restrictions on who will qualify for a Chapter 7 discharge, effective as of October, 2005. Assuming those restrictions do not apply, you will most likely be unable to file a "Chapter 7" bankruptcy if you have filed and dismissed a "Chapter 7" petition in the last 180 days, or if you were granted or denied a "Chapter 7" discharge in a prior case within the past six years. You should discuss your case with an attorney, as you may qualify for an exception.