What Kind Of Debts Can Never Be Discharged In Bankruptcy?

Bankruptcy can do a lot of things for a lot of people, and let you get the fresh financial start that you need. It’s a powerful tool for consumers, but like anything else it has some limits. There are some debts that cannot be discharged in bankruptcy. What kind of debts are no dischargeable debts?

Recent Debts

Any debt that you voluntarily incur within 90 days of your filing for your bankruptcy, may not be able to be discharged. There is an exception for absolute life necessities, like your rent or mortgage, gas, food, or other living expenses.

These debts aren’t necessarily automatically nondischargeable—it’s just that if they are challenged by a creditor or by the trustee, the bankruptcy court can, and in many cases will, refuse to discharge them, as it will look like you abused the system (that is, that you purposely amassed debt, knowing you were going to file for bankruptcy).

Family and Criminal Law Cases

Any type of debt that you have that is related to support of a spouse or child in a family law case, such as child support, alimony, or any obligation related to the division of property that is for the purposes of support, also cannot be discharged.

While any type of injury judgment entered against you is normally dischargeable, if you injure someone while you are driving drunk, that also cannot be discharged in bankruptcy. Speaking of crimes, any restitution, court costs, or other monetary obligations that step from criminal charges against you, cannot be discharged.

Government Obligations

Some government fines or penalties are nondischargeable. But that doesn’t mean that all money owed to the government cannot be discharged. If it’s in the nature of a penalty, generally, it is nondischargeable, but if it is simply a financial obligation of another kind, owed to the government, it can be discharged.

The two largest government obligations are student loans, and income taxes.

Student loans generally cannot be discharged. There is a way to discharge them technically, but doing so is a complicated and complex process. If you are in severe financial trouble, and cannot afford to pay your normal life bills, a bankruptcy court may, in some cases, grant you relief from student loans, although it is difficult.

Income taxes can be discharged, but they must be older than three years old, and you must have filed your tax return.

Fraud

Judgments that are entered against you because of fraud, or any allegation that you have cheated someone or been dishonest, may not be able to be discharged. Because this can be hard for you to tell on your own, your bankruptcy attorney can tell you if a judgment against you is one that the bankruptcy court would consider to be fraud.

Contact the Boca Raton bankruptcy attorneys at the Law Offices of Stephen Orchard at 561-455-7961 today to see whether your debts can be discharged in bankruptcy.

Sources:

law.cornell.edu/uscode/text/11/523

investopedia.com/terms/n/nondischargeable_debt.asp