Dischargeable Debts (Bankruptcy) Law and Legal Definition

Dischargeable Debts refer to debts discharged or eliminated in bankruptcy. A discharge in bankruptcy means that a person’s personal liability for a debt is eliminated. However, not all debts are eligible for discharge. Some categories of debt aren't dischargeable. For example, family support and criminal restitution are debts which cannot be discharged. There are many exceptions to discharge also. For example you might reaffirm a particular debt, such as a car loan, and continue to pay the debt.

In a Chapter 7 case, the following types of debts are normally dischargeable:

  • Business debts
  • Leases
  • Judgments against you, including car accident claims
  • Deficiencies existing after vehicle repossessions
  • Personal loans
  • Credit card account balances
  • Negligence claims
  • Liabilities under guaranty agreements

A debtor can also receive discharge in a Chapter 13 bankruptcy case. Chapter 13 gives a debtor a way to readjust or reorganize debts, much like the reorganization available to businesses in Chapter 11 bankruptcy cases.