Bankruptcy FAQs

These types of debts are typically able to be discharged:
• “Unsecured” debt (credit cards, personal loans, payday loans, etc.)
• Most court judgments
• Government benefit overpayments (as long as they are not the result of fraud)
• Unpaid rent

Certain kinds of debts are not typically able to be discharged, including the following kinds of debts:
• Student loans
• Most tax debts
• Government fines (like traffic tickets)
• Child support and alimony payments

Yes, chapter 7 bankruptcy can stop and/or prevent wage garnishment in many
circumstances. If the debt is dischargeable in bankruptcy, then filing bankruptcy is one
option to stop/prevent wage garnishment.

D.C. law also protects wages up to 40 times the D.C. minimum wage each week from
garnishment. If your wages are being garnished, or you are worried they might be, you
may want to talk to a lawyer.

Chapter 7 bankruptcy can sometimes help with government overpayments. However, it is normally best to first try to resolve the overpayment through the agency’s appeal process.  

If you have already tried and failed to resolve the overpayment with the agency, chapter 7 bankruptcy can often be used to discharge overpayments so long as they are not due to fraud. This may include overpayments for Social Security, unemployment insurance, Medicare, food stamps, and veteran’s benefits.  

Not necessarily. Even though chapter 7 bankruptcy is often called a “liquidation” bankruptcy (meaning you sell your property to pay your creditors), the law provides for “exemptions” that may allow you to protect most, if not all, of your property. In D.C., these include protection for homes and cars. Whether or not you can protect your car or house can be a complicated question, so if you are considering filing for bankruptcy and are worried about a car or house, it is a good idea to talk with a lawyer.  

Chapter 7 bankruptcy is not normally the best option if you are behind on your car payments and want to keep your car. Even though you can “discharge” the car loan, the loan holder is still allowed to repossess your car during the bankruptcy. If you want to give up your car, then chapter 7 bankruptcy can help you avoid owing the loan holder a “deficiency.” A “deficiency” is the difference between what the loan holder gets for your car at auction and the balance remaining on the loan.  

Unfortunately, chapter 7 bankruptcy will not help you avoid foreclosure in the long term if you are behind on your mortgage.  

If you are worried about foreclosure, there may be other options available to help you catch up on your mortgage. You can learn more about those options here, or by consulting with a lawyer.   

You must list all of your debts in your bankruptcy and a chapter 7 bankruptcy will discharge all of your dischargeable debts. It is possible to reaffirm debts during a bankruptcy, but that is not generally a good idea.  

Yes and no. Filing a chapter 7 bankruptcy can temporarily stop an eviction proceeding and can be used in emergencies to keep you in your home. However, the landlord can still demand payment of the back rent within 30 days of filing for bankruptcy. If you aren’t able to pay the past due rent, then the eviction can move forward. If you are a low-income tenant in danger of eviction, please reach out to Legal Aid DC to see what options may be available to you.