The first type of bankruptcy is Chapter 7, which is often referred to as a liquidation bankruptcy or fresh start. This type of bankruptcy allows for the elimination of debts, such as most credit card obligations, medical bills and other debts that do not have property pledged as collateral.

There are several debts which are not dischargeable under Chapter 7, including certain taxes, credit that is found to be obtained by fraud, debts not listed in the Chapter 7 Petition, alimony or child support, student loans, etc.