If you’ve decided to file bankruptcy, you’ve likely already looked over your options. For individuals, the most common options are Chapter 7 and Chapter 13. There are differences between these two options, including how debt is handled. Bankruptcy doesn’t simply wipe away all of your debts. If you’re filing for Chapter 7, there are some specific debts that will not be discharged. Here are some of the most common debts that won’t be discharged.
Student Loan Debt
Unfortunately, student loan debt is almost always considered non-dischargeable. There are a few very rare exceptions, but don’t count on those. You’re likely stuck with this debt.
Some Tax Debt
You may be able to have some tax debts eliminated by filing Chapter 7. Income tax debt and debt that’s over three years old can qualify for discharge. However, federal tax liens do not qualify for discharge. Like anything involving taxes, which debts are dischargeable is often complicated. You will want to talk to a qualified bankruptcy attorney about your specific situation and what taxes you owe.
If you’ve been ordered to pay alimony, child support, or spousal support, that debt cannot be discharged. You must continue to make those payments as well as you can.
If you have debts that you failed to list on your bankruptcy petition, those debts will obviously not be included in the bankruptcy. There are a few exceptions here. Most courts will allow you to add an unscheduled or unlisted debt if you can show that you honestly didn’t know about or had forgotten to list. Another exception is if the creditor had notice that you were filing for bankruptcy in some other way, such as a letter sent from you directly to the creditor.
Debts to the Government
Parking tickets and other fines or penalties that you owe a government agency cannot be discharged. Any fines that have been ordered by the court for you to pay, such as damages in a criminal case, also cannot be discharged.
Planning on filing bankruptcy? If so, you need an experienced lawyer by your side. Contact the offices of Michael F. Kanzer & Associates today for a free consultation.