Washington consumers who are experiencing financial instability because they have no stable employment may benefit from the protection of personal bankruptcy. Chapter 7 bankruptcy may also be referred to as a liquidation bankruptcy, and while it will discharge most unsecured debts, non-exempt assets will be liquidated, and the proceeds distributed to creditors. However, some debts will not be discharged, and creditors may claim that a particular debt is non-dischargeable.
The debt categories that will not be discharged include most taxes, spousal support and child support. If a creditor claims that a particular debt should not be discharged, a complaint will have to be filed with the Bankruptcy Court. Reasons for a debt to be found non-dischargeable include debts obtained fraudulently, such as providing false financial information, or any other false pretences or representations. For example, if a person uses loan funds intended for home improvements to finance a vacation, or obtains a bank loan by providing inaccurate income and asset information, those debts may not be dischargeable.