Debts You Can't Discharge in Bankruptcy

Debts You Can't Discharge in Bankruptcy 
Tony Arnest 

   In my practice, one of the most frequent questions I get is "what debts in a bankruptcy cannot be discharged?"   While there are always a few exceptions, here is how it generally shakes out:

   Bankruptcy offers a "fresh start" when you find that you're overwhelmed by your debts. People seek bankruptcy relief for a variety of reasons. For some, it stems for poor financial decisions that did not go as planned, and for others, it comes as the result of unforeseen circumstances, such as job loss, illness or catastrophe, which can affect otherwise financially responsible individuals. However, the Bankruptcy Code tries to strike a balance between a debtor's need for a "fresh start" and the fact that some debts must be repaid (referred to as “non-dischargeable debts.”)  The result is that there are some debts that won't be discharged in your bankruptcy case.

What's a Discharge?

In both Chapter 7 (the liquidation bankruptcy) and Chapter 13 (re-adjustment or repayment of debts bankruptcy), the bankruptcy court may grant you a discharge from your debts. This means that you'll have no further responsibility for the discharged debts, and your creditors can take no further collection actions against you.

HOWEVER, NOT ALL DEBTS ARE INCLUDED IN A DISCHARGE

Certain debts can't be discharged in bankruptcy. The Bankruptcy Code list several categories of such debts:

In a Chapter 7 case, the most common types of debts that can't be discharged are:

·         Taxes and tax liens

·         Student loans

·         Alimony and child support (domestic support obligations)

·         Debts obtained through fraud, false pretenses or false representation

·         Debts you failed to schedule in time to allow creditors to file proofs of claim (unscheduled debts)

·         Debts for fraud while you were acting in a fiduciary capacity, or for embezzlement or larceny

·         Debts for willful and malicious injury

·         Debts for fines or penalties to governmental units

·         Debts for judgments in wrongful death or personal injury lawsuits resulting from motor vehicle, vessel or aircraft accidents while you were intoxicated

·         Condominium or cooperative association fees or assessments

·        

If your bankruptcy case is under Chapter 13, you won't be discharged from the following types of debts:

·         Child support and alimony (domestic support obligations)

·         Student loans

·         Fines and restitution

·         Certain taxes, such as withholding taxes if you had employees, or taxes connected to fraudulent tax returns or tax evasion

·         Debts incurred through fraud

·         Debts for fraud while you were acting in a fiduciary capacity, or for embezzlement or larceny

·         Debts for willful and malicious injury

·         Judgments in wrongful death or personal injury cases arising from your intoxication

·         Unscheduled debts

·         Debts incurred after filing your case, which weren't included in your Chapter 13 plan

·         Debts that are non-dischargeable under other laws, for example amounts owed for certain health education programs

·         Interest owed on non-dischargeable debts

(The presenter, Tony Arnest, is a licensed attorney in California. He is a debt relief agency and helps people file for bankruptcy.  This information is being provided solely for educational purposes, and is not intended to offer legal advice or serve as a solicitation for business in anyway.)

Debts You Can't Discharge in Bankruptcy,
Tony Arnest, Esq.