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Debts You Can't Discharge in Bankruptcy

Bankruptcy helps hundreds of thousands of people every year clear out old debts and get a new financial start. However, there are some debts that a bankruptcy cannot erase, and will stay with the debtor until they are paid. If you are planning on filing bankruptcy in the future, learn more about the types of debts that cannot be discharged.

The bankruptcy code outlines 19 different types of debts that cannot be discharged. Some of these categories are very rare, and will not be applicable to most debtors. However, some of these debts are relatively common and could become an issue in a bankruptcy case.

Nondischargeable debts usually cannot be wiped out in bankruptcy for the general welfare of society. The federal government has decided that some debts are so important that a person will always have an obligation to pay them. For example, back child support is almost always a nondischargeable debt. Our society believes that caring for and providing financial support for a child is paramount, and that parents should not be able to relieve themselves from this obligation by filing for bankruptcy. As a result, debts for child support cannot be erased. Similarly, obligations to pay alimony or debts owed due to a divorce case also cannot be discharged in bankruptcy.

Additionally, most types of tax debts cannot be discharged in bankruptcy. Since the federal government makes the bankruptcy laws, the federal government has the ability to make sure that the debts owed to it are paid. There are exceptions for very old tax debts, but in general the federal government is not willing to allow debtors who owe back taxes to avoid their obligations by filing for bankruptcy. Likewise, fines and penalties owed to government agencies are also not dischargeable.

One of the biggest sources of debts that most people have comes from student loans. Unfortunately for debtors, student loans are almost always nondischargeable debts. While student loans can occasionally be discharged when the borrow suffers a severe disability, it is very difficult to meet the criteria to have a student loan discharged in bankruptcy. Most debtors will need to continue paying their student loans long after their bankruptcy cases end.

Additionally, debts related to criminal actions are also not dischargeable. If a person owes criminal fines, court costs, or restitution as a result of an arrest, he or she will still be responsible for paying these fines. There is also specific exception in the bankruptcy code which prohibits people who owe personal injury judgments due to driving under the influence from discharging that debt.

Finally, and logically, only debts that are actually listed on the bankruptcy petition can be discharged. If a person forgets to include a debt in the bankruptcy petition, that debt cannot be discharged. For that reason, it is important to work with an experienced bankruptcy attorney who will be sure to include all types of applicable, dischargeable debts.

At Loan Lawyers, our South Florida bankruptcy attorneys understand the ins and outs of the bankruptcy code, and will be sure to provide you with accurate and helpful legal advice about your case. If you are considering filing for bankruptcy, schedule a free initial consultation with our office today by calling (888) FIGHT-13 (344-4813).