Individuals who have found themselves in financial trouble and overwhelmed with debt may find that bankruptcy is the best option for a fresh start. These people can find financial freedom by filing for Chapter 7 bankruptcy and liquidize their assets or Chapter 13 bankruptcy and reorganize their debt. Both options allow certain debts to be discharged. When the court discharges debts, the lender is no longer take allowed to seek repayment of debts. However, not all debts are dischargeable.
In your bankruptcy case, you may find three different categories of debt that are nondischargeable:
- Some debts will never be discharged.
- Some debts are not dischargeable unless you can convince the court they should be.
- Some dischargeable debts are not discharged when a creditor can convict the court that they should not be.
Continue reading to learn more about the debts that cannot be forgiven through bankruptcy.
Debts that Cannot Be Discharged
Whether you file for Chapter 7 or Chapter 13 bankruptcy, the following debts can not be discharged:
- Spousal and child support
- Certain taxes (for example, tax liens)
- Debts accrued from purposeful and malicious injury to an individual or property (however, Chapter 13 bankruptcy property damage may be dischargeable)
- Debts incurred from operating a motorized vehicle while under the influence and caused death or injury
- Debts that were not listed when filing for bankruptcy
Exceptions to the Rule
Some debts are not dischargeable unless you meet certain legal exceptions or requirements.
For example, you must prove to the court that you are unable to repay certain debts to be dischargeable, like student loan debt. While other debts will not be discharged unless you meet legal requirements. For example, if you want to discharge income taxes, a certain amount of time must pass, and other conditions must be met.
Some dischargeable debts may not be discharged when a creditor successfully argues that the borrower should remain responsible for repaying the debt. This may include debts incurred from fraud, purchases made within 90 days of filing that were more than $725, cash advances of $1,000 or more within 70 days of filing, and more.
Dischargeable Debts in Chapter 7 and Chapter 13 Bankruptcy
While there are a handful of debts that cannot be forgiven or forgotten, there are many dischargeable debts. If you file for Chapter 7 or Chapter 13 bankruptcy, the following debts may be discharged:
- Credit card debt
- Medical bills
- Debts accrued by car wrecks
- Payment obligations under leases and contracts
- Personal Loans
- Some federal, state and local taxes
- And any other debts that do not fit into a nondischargeable category above.
Get Help From a Knowledgeable Attorney
Facing bankruptcy alone can be overwhelming and stressful. The Law Offices of Charles W. Daff have over 40 years of experience and will answer all of your questions, ease your every concern, and guide you throughout your bankruptcy process. If you or your business are in the Santa Ana, California area and need an expert in Chapter 7, Chapter 13, Chapter 11, or another form of bankruptcy, contact the professionals at The Law Offices of Charles W. Daff to schedule your free initial consultation today.