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When financial hardship hits, many people turn to bankruptcy as a way to regain control and get a fresh start. But one of the most common questions our clients ask is: Does filing for bankruptcy clear all debt? The answer depends on the type of bankruptcy filed and the nature of your debts. At Weintraub Zolkin Talerico & Selth, we guide individuals and business owners in Los Angeles through the bankruptcy process, helping them understand what debts can be discharged and which ones may remain.
Understanding Dischargeable vs. Nondischargeable Debt
Bankruptcy is a powerful legal tool that can eliminate many types of debt—but not all. “Dischargeable” debts are those that can be erased through bankruptcy, giving you relief from repayment obligations. Common dischargeable debts include:
Credit card debt
Medical bills
Personal loans
Utility bills
Past-due rent (in some cases)
On the other hand, “nondischargeable” debts typically survive bankruptcy. These include:
Most tax debts
Child support and alimony
Student loans (unless you can prove undue hardship, which is difficult)
Debts from fraud or intentional wrongdoing
Court-ordered fines and restitution
At Weintraub Zolkin Talerico & Selth, we review your financial situation in detail so you’ll know exactly what to expect from the bankruptcy process.
Chapter 7 vs. Chapter 13: How It Affects Debt Discharge
The type of bankruptcy you file also affects which debts are cleared and how.
Chapter 7 bankruptcy is known for its speed and simplicity. It allows you to eliminate most unsecured debts in a matter of months. However, you may have to surrender certain assets depending on your situation. It’s best suited for those with limited income and few assets.
Chapter 13 bankruptcy works differently. Instead of wiping debts away right away, it reorganizes them into a 3–5-year payment plan based on what you can afford. At the end of the plan, any remaining eligible debts are discharged. Chapter 13 is helpful for those who want to catch up on mortgage payments or prevent repossession.
What About Business Debt?
If you’re a business owner considering Chapter 11 bankruptcy, your situation becomes more complex. Chapter 11 allows businesses to restructure their debts and operations while continuing to run. Some debts may be discharged, while others are renegotiated or reorganized. Our team at Weintraub Zolkin Talerico & Selth has extensive experience in handling Chapter 11 for businesses of all sizes.
Personalized Guidance Every Step of the Way
Bankruptcy is not a one-size-fits-all solution. The key is knowing which type of bankruptcy fits your goals and how it will impact your unique debts. Our attorneys take the time to analyze your specific financial landscape, explain your legal options, and help you create a strategy that supports your long-term success.
If you’re wondering whether bankruptcy will clear your debt or help you protect your assets, we’re here to answer your questions and provide the clarity you need.
Ready to explore your options? Call us at (310) 220-4147 to schedule a confidential consultation.