In short, no, not all debt is eligible to be discharged in Chapter 7 bankruptcy relief.
Most unsecured debt, such as credit card debt, medical bills, and personal loans are eligible for being discharged when you declare bankruptcy. However, there are certain categories of debt that are not dischargeable. These 19 categories of debt were decided by Congress to be ineligible for discharge, generally due to public policy reasons.
Debts ineligible for discharge include any federal student loan debts and domestic debts such as child support or alimony, as well as any recently accrued federal, state, or local taxes. It is also important to note that any new debt that has been taken on since the start of the bankruptcy proceedings would be ineligible for discharge, as only the debts listed in the initial bankruptcy petition will be considered.
There are also situations where the debts may not be dischargeable if the creditor objects.
Though less common, it is also worth noting that any debt that is connected to any kind of fraudulent activity may not be eligible to be discharged. There are also other specific kinds of debts that will not necessarily be discharged because of creditor objections, such as luxury purchases within 90 days of your initial filing, or any cash advances over $1,000 taken out within 70 days of filing. Creditors would have to file their objections with the court and the court would make the final decision about whether those particular debts would be able to be discharged or if the bankruptcy petitioner would still be liable to repay them.
If most of your debts are debts that are not dischargeable under Chapter 7, it may not be in your best interest to declare bankruptcy. If this is the case, it is important that you contact an experienced bankruptcy attorney in your area who can review the facts of your case and help you make an informed decision about which route to take that works best for your specific situation.