Can personal loans be discharged in chapter 7?

If you either make less than your state's median income or you pass a means test, then you may be eligible for chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as "total discharge" bankruptcy because, unlike chapter 13, you don't have to keep paying on (most of) your debts after a chapter 7 is done. The process begins by filing the forms of filling out details about your assets and debts. Non-exempt assets that you have are sold, and the proceeds next distributed to your different creditors. Then, most debts that remain are forgiven, with the exception of those that cannot be discharged in bankruptcy. 

If you find yourself going through this process, you may wonder what types of debts can be discharged and what types can't. In particular, you may be concerned about personal loans in chapter 7 and whether you can get these reduced. As a general matter, the answer is that yes- personal loans can be discharged in chapter 7. This is true because these are not secured debts and there's no collateral. If you do have a personal loan that you attached collateral too, however, then this becomes a different situation entirely.

To make sure your debts will be eligible to be included in your bankruptcy filing, you should strongly consider speaking to a lawyer for help.