Whether you choose to file Chapter 7 bankruptcy and have qualifying unsecured debts discharged or if you are forced to repay your debts by filing Chapter 13 bankruptcy, there will be certain debts which are considered nondischargeable debts. Filing any type of bankruptcy will not discharge or clear all of your debts.
Nondischargeable debts not cleared by filing Chapter 7 bankruptcy
Although there are a few differences, the nondischargeable debts not discharged after bankruptcy are generally the same for both Chapter 7 and Chapter 13. Below is a detailed list of the nondischargeable debts which will not be discharged or cleared in Chapter 7 bankruptcy.
1. Debts for alimony, child support.
2. Debts for certain taxes and tax liens.
3. Debts for certain educational benefit overpayments or loans made by the federal government (exceptions exist).
4. Debts for willful and malicious injury by the debtor to another entity or to the property of another entity.
5. Debts assessed after a personal injury case or criminal case if the debtor was under the influence of alcohol and has been ordered to pay criminal or civil restitution.
6. Debts for money or property obtained by false pretenses, including debts for fraud or defalcation while acting in a fiduciary capacity, including embezzlement or larceny.
7. Debts discharged through fraud or misstatement of facts by the debtor.
8. Debts not scheduled in time to allow creditors to file proofs of claim (unscheduled debts).
9. Debts for fines or penalties to governmental units.
10. Debts for condominium or cooperative association fees.
Prior to filing bankruptcy it’s important to review whether your debts are nondischargeable debts. If you have high tax debts, student loans, and alimony payments filing bankruptcy is unlikely to help solve your financial crisis. If, on the other hand, you have high medical bills, credit card debts, or payday loans, bankruptcy might help.
Chapter 13 and nondischargeable debts
Chapter 13 bankruptcy gives the debtor a bit more leeway for debt discharge, but there are still certain nondischargeable debts which will not be cleared or erased following the completio of your Chapter 13 bankruptcy plan.
1. Child support and spousal support payments
2. Student loans (exceptions exist if you can prove undue hardship)
3. Fines and restitution
4. Debts obtained through fraud or while acting in a fiduciary capacity, including larceny and embezzlement.
5. Certain tax debts
6. Certain debts for payments after a judgment for wrongful death or personal injury for DUI.
7. Debts which were not included in the Chapter 13 debt repayment plan.
8. Debts for malicious and willful injury
9. Debt generated from interest for nondischargeable debts
10. Debts which you accumulated after filing your Chapter 13 bankruptcy and which were not in your plan.
11. Debts not scheduled in time to allow creditors to file proofs of claim (unscheduled debts).
Filing bankruptcy is a good decision for some debtors, but as you can see from the list above, many debts are nondischargeable debts and will not be resolved through bankruptcy. Talk to a bankruptcy lawyer for more information about your case.
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