What Debts Should I Continue to Pay During My Chapter 7 Bankruptcy Case?

If you've filed for Chapter 7 bankruptcy or will soon, it's unsurprising that you're unsure which bills you should stop paying. While no one wants to waste money, failing to pay the necessary bills could have catastrophic results. Learn how understanding which debts Chapter 7 will eliminate and which you'll remain responsible for can help you avoid vehicle repossession, eviction, losing utilities, and more.

Debts You'll Pay During Chapter 7 Bankruptcy

You'll have three types of debts you'll want to pay during Chapter 7—those you incur after filing for bankruptcy, debts you can't eliminate, and debts you don't want to erase in bankruptcy.

Debts Incurred After Filing

A Chapter 7 filing erases or "discharges" qualifying debts incurred before filing for bankruptcy—not afterward. These dischargeable debts are known as "prepetition" debts.

All debts you incur after the bankruptcy filing date are "postpetition" and aren't part of the bankruptcy case. In Chapter 7 bankruptcy, you are responsible for paying postpetiton debts.

There are no particular debts that fall into this category. You must pay all bills you accumulate after filing your case. For instance, you'd typically pay your rent, phone bill, vet bills, and car payment if you're keeping the car.

Example. Charlyne fell behind on her electric bill before filing for Chapter 7. The total prepetition amount she owed to the electric company was $425. Two weeks after she filed, the total bill increased to $500. Charlyne will owe the postpetition amount of $75, and $425 will be discharged in her bankruptcy case. Learn more about what happens to utility bills in bankruptcy.

Example. Helmet filed for Chapter 7 on August 1, 2024, because he couldn't pay the $75,000 it cost to treat his severe illness. A week after filing, he had a relapse and incurred $5,000 more for emergency care. When Helmet's Chapter 7 case ended four months later, he remained responsible for the $5,000 postpetition emergency room bill. However, the bankruptcy erased the $75,000 for his prepetition treatment.

Debts You Can't Discharge

Bankruptcy doesn't erase all debt types. "Nondischargeable debts" are those you can't eliminate in a Chapter 7 case. Something many filers find surprising is that when you receive the Chapter 7 discharge order, it won't list your specific discharged debts. Instead, it will list the categories of debts that won't be eliminated.

You'll need to determine which of your obligations fall within the following nondischargeable categories:

• domestic support obligations, such as child and spousal support
• property division obligations pursuant to divorce (although you can discharge these debts in Chapter 13)
• student loans (to erase student loans, you must prove an inability to pay due to hardship in a bankruptcy trial)
• recently incurred income tax debt (older income tax debt is sometimes dischargeable)
• most other tax debt
• debts relating to death or personal injury when caused by operating a vehicle while under the influence
• fines, penalties, forfeitures, and criminal restitution obligations
• some debts not listed in the bankruptcy petition (this issue arises most frequently when assets are available and in cases of fraud)
• loans owed to pension, profit sharing, stock bonus, and retirement plans, and
• debts the bankruptcy court decided not to discharge in the Chapter 7 case.

The last category typically involves debt incurred by fraud. These are debts that the bankruptcy court would usually discharge. However, the creditor filed a fraud trial or "adversary" proceeding and won, thereby turning a dischargeable debt into a nondischargeable debt the filer remains responsible for paying.

Learn when running up credit cards before filing for bankruptcy is considered fraud.

Debts You Don't Want to Discharge

You can discharge a mortgage, car loan, and any other payment you're making for property. However, you must return the home, car, or other asset serving as collateral to the lender.

Here's why. If you have an asset you'd like to keep, but you've pledged it as collateral, or someone has placed a lien on it, you must pay what you owe or as agreed. Otherwise, you'll lose it.

Example. Holly wanted to file for Chapter 7 bankruptcy but worried about losing her home. She met with a bankruptcy lawyer who explained that as long as she was current on her payments when she filed and continued to make timely payments, she wouldn't lose her home to the lender. She also wouldn't lose her home to the Chapter 7 trustee because she was able to protect all of her home equity with a bankruptcy exemption—another requirement for keeping a house in Chapter 7 bankruptcy.

Important note. You must meet additional criteria to keep a home or car in bankruptcy. Learn more about what happens to property in bankruptcy.

Debts You Won't Pay During Chapter 7 Bankruptcy

You'll want to stop paying anything you can discharge in your Chapter 7 case. Many people stop paying these debts as soon as they determine they qualify for Chapter 7 bankruptcy and intend to file. However, you'll want to talk with a bankruptcy attorney before proceeding. It can be difficult to catch up if you later learn you don't qualify for Chapter 7 bankruptcy.

So what debts can you discharge? Everything that isn't listed in the "Debts You Can't Discharge" section. Your bankruptcy lawyer can verify the debts you don't need to pay and when it's safe to stop paying them.