Claims Classes

• Under a Chapter 7 petition, claims against you are grouped into six classes and are paid according to the class in which they fall. The highest classes are paid in full first before the next-lower class receives any payments. Further, secured liens are paid before any of the six classes of claims are addressed. If you own property that is free and clear of liens, the trustee will liquidate your property in order to obtain the funds to make these payments.
  
  

Secured and Other Debts

• If you have no assets, your unsecured loans, credit cards and unpaid medical bills are entirely written off, and you pay nothing for these debts. You must, however, pay secured debts because the lender remains protected by the collateral. If you have a car loan, for example, the lender may choose to repossess the car if you default on payments. You may be able to hold on to some of your property if it falls under an exempt status. The portion of your property that you may apply to exempt status depends on the state in which you live. Other debts that you must pay include debt developed due to fraudulent means.
  
  

Support Payments

• Support payments such as alimony, child support and any other debts related to maintenance or support are not dischargeable. Lawyer fees that one spouse pays for the other spouse are considered to be part of support and are also not dischargeable. These domestic support obligations are verifiable in a divorce decree, separation agreement, property settlement agreement, court-ordered support obligations or child enforcement agency's directions. The only exception is where a separation agreement is made between domestic partners rather than a married couple.
  
  

Tax Liens and Student Loans

• Income tax debt that occurs after you file will not be discharged. Also, property taxes are only dischargeable if they were due more than a year before you filed for bankruptcy. If the property taxes are discharged, the lien will still remain on the property, and you must pay the lien before you can sell the property. Customs duties, payroll taxes and excise taxes are also not dischargeable. Student loans or loans obtained for any type of educational purposes are not likely going to be discharged either. The only time student loans are discharged is when you can prove that you are experiencing undue financial hardship and that it is going to remain.