Debts You Cannot Discharge

When you find yourself totally overwhelmed by your debts, bankruptcy offers you a “fresh start”. There are numerous reasons that people turn to bankruptcy, things like a serious illness, loss of a job, and so many other things one has no control over. Of course, there are times that irresponsibility or horrible decisions can be behind the filing of bankruptcy.

The law does it’s best to balance the scale between the interest of the creditors involved and the need for a fresh start. The fact is however that so many people do not understand that all types of debts are not wiped out by bankruptcy. Some debts have to be paid, and in a bankruptcy case, one will not receive a discharge from those debts. You should know and understand what to expect in a bankruptcy case, and just what debts will not be discharged.

Defining Discharge From Debt

A discharge from your debts is granted by the bankruptcy court in both Chapter 7 (liquidation) and Chapter 13 (readjustment of debts), and this is the reason one seeks bankruptcy relief. This means that for the discharged debts you will have no additional responsibility, and no further actions may be taken against you by the creditors who are involved.

Debts Excluded From Discharge

In bankruptcy, there are certain debts that cannot be discharged. There are 21 categories of such debts that are listed in the Bankruptcy Code.

Chapter 7 Debts That Are Non-dischargeable

The most common types of debts in a Chapter 7 case that cannot be discharged are:

  1. Student loans
  2. Taxes and tax liens
  3. Debts obtained through fraud, false representation, or false pretenses
  4. Alimony and child support(domestic support obligations)
  5. Debts for larceny, embezzlement, or fraud, while you were acting in a fiduciary capacity
  6. Debts which you failed to schedule in a timely fashion to allow creditors to file proofs of claim
  7. Debts for fines or penalties to governmental units
  8. Debts for willful and malicious injury
  9. Debts for judgments in personal injury or wrongful death lawsuits resulting from motor vehicle, aircraft, or vessel accidents
  10. committed while you were intoxicated
  11. Cooperative or Condominium association assessments or fees

Chapter 13 Non-dischargeable Debts

You will not be discharged from the following types of debts if your bankruptcy case is under Chapter 13:

  1. Student loans
  2. Alimony and child support(domestic support obligations)
  3. Fines and restitution
  4. Debts incurred through fraud
  5. Certain taxes, such as those connected to tax evasion, or fraudulent tax returns
  6. Debts for willful and malicious injury
  7. Debts for embezzlement, larceny, or fraud while acting in a fiduciary capacity
  8. Judgments in personal injury or wrongful death cases arising from your intoxication
  9. Unscheduled debts
  10. Debts which weren’t included in your Chapter 13 plan, and were incurred after filing your case
  11. Interest owed on nondischargeable debts
  12. Debts which are under other laws non-dischargeable, such as amounts owed for certain health education programs

It is a big decision to file bankruptcy in Gwinnett, Georiga and the more knowledge you have about how the process works, the more power you will have to make the best choices in the situation you are in.

Questions For Your Attorney
  1. If a debt is not discharged, what typically happens? How likely is it that continued collection efforts will be made by the creditor?
  2. If I have not paid them off, and in the future, I file for bankruptcy, how are non-dischargeable debts treated?
  3. If to pay a nondischargeable debt, I take out a loan, what is that loan’s discharge status should I file for bankruptcy? Can it possibly be discharged?

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