What Debts Are Wiped Out in Chapter 7

A Chapter 7 discharge wipes out credit card balances, medical bills, personal loans, payday loans, the deficiency left after a repossession or foreclosure, old utility and phone bills, most civil judgments, and personal guarantees on business debt. Roughly three to four months after filing, those creditors can never lawfully collect from you again.

The list, in plain terms

Unsecured debt is the target. That means any debt where the creditor has nothing to take back if you stop paying. In a typical Los Angeles case the schedule looks like this:

• Credit cards, store cards and charge accounts, including ones already sold to a debt buyer
• Medical and dental bills, hospital balances, ambulance bills
• Personal loans, signature loans, online lender balances, buy-now-pay-later accounts
• Payday loans and title loan balances that survive after the car is gone
• The deficiency after a repossessed car is auctioned
• The deficiency after a short sale or a foreclosure on a non-purchase-money loan
• Old rent, including what a former landlord says you owe after you moved out
• Old utility, cell phone and cable balances
• Overdrawn bank accounts and closed-account balances
• Judgments on any of the above, and the interest on those judgments
• Personal guarantees you signed for a business, including a closed one
• Older income taxes that meet the timing rules

Most people who call us have five to fifteen of these. The trustee doesn't care whether a card was used for groceries or a trip to Cabo, so long as it wasn't run up in the weeks before filing.

What discharge actually means

The discharge is a court order. It doesn't make the debt disappear from history; it makes it permanently uncollectible. The creditor can't call, sue, garnish, levy, or report the balance as owed. A collector who violates the discharge order can be sanctioned, and Central District judges do sanction them.

It also doesn't erase every trace. The account will show on your credit report as "included in bankruptcy" with a zero balance. That's a better line than "charged off, $8,400 past due," which is what most people are carrying when they call.

And it applies to you, personally. A co-signer stays on the hook unless they file too. A lien stays on the property unless it's avoided. Those are the two things people most often misunderstand about the word "wiped out."

Judgments, and the liens they left behind

A creditor who already sued you and won doesn't get better treatment. The judgment for a credit card debt is discharged like the card itself. Any wage garnishment stops the day the petition is filed, and the judgment creditor can't restart it after discharge.

The wrinkle is the abstract of judgment. If the creditor recorded one with the Los Angeles County Recorder, there's a lien on any real property you own. The discharge kills the debt but not the lien. We file a separate motion under section 522(f) to avoid the lien where it impairs your homestead exemption, and in most consumer cases it does. That motion is quoted separately from the flat fee.

Medical debt, specifically

Hospital debt is where the numbers get large fast. A three-night stay at Cedars with a high-deductible plan can produce $30,000 in balances across four billing entities, and the collector calls start before the last EOB arrives.

All of it is dischargeable. There's no rule that treats medical debt differently, and there's no minimum. If a $2,200 ambulance bill is the thing that pushed you to look this up, it's on the list with everything else. Whether filing makes sense for $2,200 alone is a different question, and we'd probably tell you it doesn't.

Debts you can keep paying anyway

Discharge is not a ban on paying. You can send your dentist a check after the case closes if you want to, and some clients do. Keeping up the car loan to keep the car is fine. So is paying back a family member. What you can't do is be forced.

The one place this needs care is a formal reaffirmation agreement, which puts the debt back on you legally. We cover when that's a mistake on the page about reaffirmation agreements.

The other side of the ledger

Some debts survive: child and spousal support, most student loans, recent income taxes, debts from fraud or drunk driving, and criminal fines. We list them, with the exceptions that surprise people, on our page about what Chapter 7 won't discharge. Before anyone pays us a fee, we go through the debts line by line and tell you which column each one lands in. If most of what you owe is in the wrong column, Chapter 7 may not be worth filing, and we'll say so.

From Naomi

The one that still catches me off guard is how often someone is carrying a $6,000 balance from a gym or a car they gave back in 2019 and thinks it's a different kind of debt because a lawyer's letterhead is on the collection notice. It isn't. A deficiency is a deficiency. It goes on Schedule E/F with the Visa card and it comes off at discharge. Letterhead doesn't change the category. Only the Bankruptcy Code does that.

Questions people ask about this

Written and reviewed by Naomi Reyes-Ashford, Certified Specialist in Bankruptcy Law, State Bar of California Board of Legal Specialization. Last reviewed September 2026.