Chapter 7 discharges most debts from before you filed, but you must still pay new bills, a few debts required by law, and any tied to property you keep.
You can stop paying any debt your Chapter 7 bankruptcy discharges, but you must keep paying debts you incur after you file, debts the law won’t erase, and any debt secured by property you want to keep. Knowing the difference matters because stopping payment on the wrong bill can cost you your car, your home, your utilities, or more. Below, find out exactly which debts fall into each category so you can plan your payments with confidence once you file.
Debts You Can Stop Paying in Chapter 7 Bankruptcy
You can stop paying any prepetition debt that Chapter 7 discharges. In other words, anything that isn’t listed in the “Debts You Can’t Discharge” or “Debts You Must Keep Paying” sections below. Most filers stop paying these debts as soon as they know they qualify for Chapter 7 and intend to file.
Caution. Talk with a bankruptcy attorney before you stop paying anything. If you later learn you don’t qualify for Chapter 7 bankruptcy, it can be difficult to catch up on the bills you stopped paying. Your bankruptcy lawyer can verify which of your debts qualify for discharge and confirm when it’s safe to stop paying them.
Debts You Can’t Discharge in Chapter 7 Bankruptcy
Bankruptcy doesn’t erase every debt. “Nondischargeable debts” are the ones you can’t eliminate in a Chapter 7 case, and you’ll remain responsible for paying them after your case closes. Something many filers find surprising is that the Chapter 7 discharge order won’t list your specific discharged debts. Instead, it lists the categories of debts that won’t be eliminated, and you’ll need to determine which of your obligations fall within them. (11 U.S.C. § 523.)
Debt Categories the Law Won't Discharge
- 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 or vessel while intoxicated
- 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.
Debts a Court Refuses to Discharge
The last category above typically involves debt incurred by fraud. These are debts the bankruptcy court would usually discharge, but the creditor filed a fraud trial or “adversary” proceeding and won, turning a dischargeable debt into a nondischargeable one the filer remains responsible for paying.
Debts You Must Keep Paying to Keep Secured Property
You can discharge a mortgage, car loan, or any other payment you’re making for property, but you must return the home, car, or other asset serving as collateral to the lender if you stop paying it. 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 could protect all of her home equity with a bankruptcy exemption, another requirement for keeping a house in Chapter 7 bankruptcy. (11 U.S.C. § 522)
Important note. You'll want to fully understand the requirements you must meet to keep property before filing. For instance, you must meet additional criteria to keep a home or car in bankruptcy.
Debts You Incur After Filing for Bankruptcy
You must pay every debt you incur after your bankruptcy filing date, in full and on schedule, because Chapter 7 only discharges qualifying debts you owed before you filed. These pre-filing debts are known as “prepetition” debts. Debts you incur after the filing date are “postpetition” debts, and they aren’t part of the bankruptcy case at all. (11 U.S.C. § 727.)
There’s no set list of 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.
Talk to a Bankruptcy Lawyer Before You File
The debts you can stop paying in Chapter 7 are the ones you owed before you filed and that aren’t nondischargeable or secured by property you want to keep. Everything else, you’ll need to keep paying. Because getting this wrong can cost you a car, a home, or utility service, talk with a bankruptcy attorney before you stop paying any bill. An attorney can confirm which of your debts are nondischargeable, whether Chapter 7 or Chapter 13 fits your situation better, and how to handle any debt bankruptcy won’t erase.
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