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Which Debts Can Not Be Discharged by Filing for Bankruptcy?

Posted on in Bankruptcy
Which Debts Can Not Be Discharged by Filing for Bankruptcy?

When an individual is facing insurmountable levels of personal debt, bankruptcy is often the only way to escape from this debt and regain his or her financial independence. Individuals can file for Chapter 7 or Chapter 13 bankruptcy, depending on the level of debt and their disposable income. Through bankruptcy, debts are reduced or even completely eliminated. Although filing for bankruptcy and discharging one's debts can be an attractive option, it is important that an individual considering bankruptcy understand that not every type of debt can be discharged.

Talk to your attorney about which types of debt can be discharged with each type of bankruptcy. Whether you file for Chapter 7 or Chapter 13 can determine which debts you can have discharged and which you are required to pay off.

For individuals who make less than their state's median income level or those who pass the Chapter 7 means test, Chapter 7 is an available way to discharge debts. Chapter 7 bankruptcy is known as liquidation bankruptcy and involves the selling off of an individual's nonexempt property to repay debts. But not all debts can be discharged through Chapter 7 bankruptcy, such as the following:

  • Condominium or cooperative housing association fees;
  • Child support;
  • Spousal maintenance;
  • Student loans;
  • Taxes and tax liens;
  • Debts for fines or penalties to government institutions;
  • Debts obtained through fraud;
  • Debts obtained through embezzlement;
  • Judgments in wrongful death and personal injury cases caused by your intoxication; and
  • Unscheduled debts. These are debts that you did not schedule in time for your creditors to submit proof of claim.

Which Debts Can Not be Discharged with Chapter 13 Bankruptcy?

For individuals who do not qualify for Chapter 7 bankruptcy, Chapter 13 is a viable option. Unlike Chapter 7, Chapter 13 does not involve liquidation. Instead, it involves careful budgeting and a repayment plan through the court. This is even true for some individuals who do qualify for Chapter 7 bankruptcy.

If you file for Chapter 13 bankruptcy, you will not be able to discharge the following debts:

  • Student loans;
  • Child support;
  • Spousal maintenance;
  • Debts incurred through fraud;
  • Unscheduled debts;
  • Fines;
  • Restitution;
  • Debts incurred through embezzlement;
  • Debts incurred after filing for bankruptcy;
  • Judgments in wrongful death and personal injury cases caused by your intoxication;
  • Any interest owed on nondischargeable debts;
  • Withheld taxes if you are an employer; and
  • Debts that are made nondischargeable under other laws;

Bankruptcy Attorneys in Chicago Can Help

For legal advice and representation as you work through the process of reclaiming control of your finances through bankruptcy, work with an experienced bankruptcy attorney. Our team of attorneys at Newland & Newland, LLP can help you by answering your questions and representing your interests. Contact our firm today to schedule your legal consultation with us.

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