The purpose of a chapter 7 bankruptcy is to discharge or wipe out your debts. In exchange, you must give up certain property which is not exempt under the law. Many times all of your property will be exempt. In the case of some secured debt, you may be able to either reaffirm the debt and continue making payments or surrender the property back to the creditor. However, if you have a car loan or mortgage and you are behind on the payments, the chapter 7 does not take away the rights of these secured creditors. If you are in this situation you may want to consider a chapter 13 bankruptcy.

Some debts cannot be discharged in a chapter 7 bankruptcy. These include child support, taxes, student loans, personal injury claims from drunk driving cases, fines and penalties owed to the government, debts obtained by fraud and debts incurred by willful and malicious injury.

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