What Kind Of Debts Can’t Be Discharged In Bankruptcy?
Bankruptcy can be the biggest step you will make to a completely fresh financial start. For most people, bankruptcy will eliminate all of their debts. But contrary to popular belief, bankruptcy does not eliminate every kind of debt. There are some debts that cannot be discharged at all in bankruptcy.
Debts that are Not Dischargeable in Bankruptcy
You should never charge anything on credit, within 90 days of filing for bankruptcy, because those charges may be considered non dischargeable. In some cases, if the charges are used for non-luxury expenses (that is, living expenses like rent, mortgage, gas, or a necessary car payment or car repair), it will be OK—but it is still best to avoid making any charges on credit at all within this time period.
Domestic obligations, like child support and alimony, also can’t be discharged in bankruptcy.
Personal injury judgments against you can be discharged in bankruptcy—but not if they are the result of drunk driving. Injury judgments that arise from intentional or willful acts also may not be dischargeable. Additionally, any criminal restitution entered against you for committing a crime, is not dischargeable.
Income taxes that were incurred within the last three years (assuming you filed your tax returns timely) cannot be discharged, but taxes after that period, can be discharged.
Government fines cannot be discharged, but that doesn’t mean that any government debt is nondischargeable. Many in fact can be discharged, just not any money that has been assessed as a penalty.
Student loans are a big topic of discussion. Generally, student loans, whether the loan is public or private, cannot be discharged—at least, not if a creditor objects. It is possible to fight the objection on the basis of hardship. Your bankruptcy attorney can discuss your chances of discharging your student loans in bankruptcy.
Any judgment entered against you as a result of fraud or dishonesty also cannot be discharged.
Secured loans are dischargeable, as far as your personal obligation to pay the money. However, the liens related to the loans do survive, meaning that any property secured by the loans, such as a house or a car, can still be taken.
Why File for Bankruptcy?
If you have any of this kind of debt, bankruptcy can still be helpful to you. The money you free up by not paying the debts that are discharged, can allow you extra income to pay or catch up on the debts that can’t be discharged in bankruptcy.
Additionally, Chapter 13 bankruptcy will allow you the chance to “catch up” or get current, on the denbts that you are behind on. That means that when your Chapter 13 plan is over, although you will still owe the non-dischargeable debt, you will at least be caught up and not in default.
Questions about whether your debt can be discharged in bankruptcy? Contact the Boca Raton bankruptcy attorneys at the Law Offices of Stephen Orchard at 561-455-7961 today to help.