No. Filing bankruptcy does not clear all debt. It eliminates most unsecured obligations — credit cards, medical bills, personal loans, old utility balances — but federal law shields several categories from discharge no matter which chapter you file. Child support and alimony, most tax debts, student loans (with a narrow exception), debts from fraud or intentional harm, DUI-related injury claims, and criminal fines and restitution all survive. Whether filing bankruptcy clears all debt depends entirely on what kind of debt you have.
What a Discharge Actually Erases
A discharge is a court order that permanently releases you from the legal obligation to repay specific debts. Once entered, it voids any judgments tied to those debts and imposes a permanent injunction: creditors cannot call, write, sue, or take any other step to collect.1Office of the Law Revision Counsel. 11 US Code 524 – Effect of Discharge Even before the discharge, filing the petition triggers an automatic stay that halts lawsuits, garnishments, foreclosures, and collection calls.2Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
The discharge only covers debts that existed on the filing date. Anything you borrow afterward is yours to pay.
Debts Bankruptcy Usually Clears
Most unsecured debts — those with no collateral behind them — go away in a successful case. The typical list:
- Credit card balances, unless the creditor proves fraud (for example, a spending spree just before filing).
- Medical bills, at any amount.
- Personal loans, including bank loans and payday loans.
- Past-due rent and utility bills owed before filing. A utility can require a new deposit to restore service.
- Deficiency balances after a repossession, such as what you still owed after a car was sold at auction.
- Some older income tax debts, if they meet the strict timing rules below.
Debts That Survive Bankruptcy
Congress carved out categories that a discharge does not touch, regardless of chapter.3Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
- Child support and alimony. Domestic support obligations are never dischargeable, whether owed to a former spouse, a child, or a government agency that took assignment.
- Most tax debts. Recent income taxes, payroll taxes, and any tax tied to a fraudulent return cannot be cleared.
- Debts from fraud. Money obtained through lies on a credit application or false financial statements survives, if the creditor files a complaint in the case and proves the fraud. Miss that window and the debt gets discharged anyway.
- Debts for willful and malicious injury to a person or property.
- Personal injury or death caused by driving intoxicated.
- Criminal fines and restitution from a conviction.
- Government benefit overpayments tied to fraud.
For fraud and intentional-harm debts, the creditor carries the burden. They must file a separate adversary proceeding within the bankruptcy case; if none is filed, the debt gets discharged by default.
Student Loans Are Their Own Category
Student loans are presumed non-dischargeable, but the presumption can be beaten if you prove that repaying them would create an “undue hardship.” That requires filing a separate lawsuit within the bankruptcy case, called an adversary proceeding.4U.S. Department of Education. Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings
Many courts apply the Brunner test, which asks whether you can maintain a minimal standard of living while repaying, whether your circumstances are likely to stay that way for much of the repayment period, and whether you made good-faith efforts to pay before filing. Other courts use a broader “totality of circumstances” analysis.
The Department of Justice and Department of Education have issued joint guidance creating a standardized process for evaluating undue-hardship claims on federal loans. DOJ attorneys now review objective financial criteria rather than reflexively opposing every request.5U.S. Department of Justice. Student Loan Guidance Discharge is more realistic than it was a decade ago for borrowers with genuinely dire finances, but it still requires litigation and is not guaranteed.
When Older Income Taxes Can Be Cleared
Some income tax debts can be discharged, but only if every one of these conditions is met at once:
- The return was due at least three years before the bankruptcy filing, including any valid extensions.
- The return was actually filed at least two years before the bankruptcy filing.
- The IRS assessed the tax at least 240 days before filing, or has not yet assessed it.
- The return was not fraudulent and you did not willfully try to evade the tax.
Miss one condition and the tax is non-dischargeable. Payroll taxes and fraud penalties never qualify, no matter how old. Certain events, like a prior bankruptcy filing or an offer in compromise, can toll the clock, so the arithmetic is easy to get wrong.
Secured Debts: The Lien Outlives the Discharge
Mortgages, car loans, and other secured debts work differently, and this is where filers most often misunderstand what a discharge does. Bankruptcy can wipe out your personal obligation to pay, but it does not remove the lien on the property.6United States Courts. Discharge in Bankruptcy – Bankruptcy Basics If you stop paying after discharge, the lender can still foreclose or repossess.
In Chapter 7 you generally choose among three options for secured property: surrender it and walk away with no further liability; reaffirm the debt by signing a new agreement that puts you personally back on the hook (subject to court approval); or redeem tangible personal property, such as a car, by paying the creditor a lump sum equal to the property’s current value.7Office of the Law Revision Counsel. 11 USC 722 – Redemption Chapter 13 lets you catch up on missed mortgage payments over the length of the plan while keeping the home, and in some cases reduce the principal on an older car loan to the vehicle’s current value.
Co-Signers Are Not Covered
A discharge protects you, not anyone who signed with you. If a parent, spouse, or friend co-signed a loan or credit card, the creditor can pursue that person for the full balance even after your case ends.
Chapter 13 offers a temporary co-debtor stay that blocks collection against co-signers on consumer debts while your plan is active.8Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor If the plan pays the co-signed debt in full, the co-signer is permanently protected; if not, they owe whatever remains once the plan ends. Chapter 7 has no equivalent, so creditors can pursue co-signers immediately.
Chapter 7 vs. Chapter 13: Does the Chapter Change What Gets Cleared?
Both chapters discharge the same core list of debts and honor the same list of exceptions, but they are not identical.
Chapter 7 liquidates non-exempt assets and typically wraps up within four to six months, with qualifying debts discharged at the end.9United States Courts. Chapter 7 – Bankruptcy Basics Most consumer cases are “no-asset” filings where exemptions cover everything. Not everyone qualifies: a means test compares your household income to the state median, and filers with too much disposable income are steered toward Chapter 13. Disabled veterans and filers with primarily business debts are exempt from the means test.
Chapter 13 uses a three-to-five-year repayment plan, with qualifying debts discharged at the end of the plan.10United States Courts. Chapter 13 – Bankruptcy Basics Its discharge is slightly broader in one respect: debts from a divorce property settlement that are not domestic support obligations can be discharged in Chapter 13 but not Chapter 7.11Office of the Law Revision Counsel. 11 US Code 1328 – Discharge Congress narrowed that advantage in 2005, so the major categories — fraud, student loans, DUI injury claims, criminal restitution, and support obligations — remain non-dischargeable in both chapters.
When the Court Can Refuse to Discharge Anything at All
In Chapter 7, the court can deny a discharge across the board, not just for individual debts, if you engaged in misconduct: hiding or destroying assets, falsifying records, lying under oath, or refusing to obey court orders. A prior Chapter 7 discharge within the past eight years also bars a new one.12Office of the Law Revision Counsel. 11 US Code 727 – Discharge The trustee, a creditor, or the U.S. Trustee can raise the objection. The worst outcome in bankruptcy is going through the entire process, losing non-exempt assets, and ending up with every debt still owed.
So the practical answer to the question the filing is meant to solve: bankruptcy clears a lot, but you have to know what stays. Line up your debts against the categories above before filing. If most of what you owe is credit card, medical, and personal loan debt, a discharge does almost exactly what you hope it does. If a large share is child support, recent taxes, or student loans, the fresh start will be much narrower than the word “discharge” suggests.