Debts That Cannot Be Discharged
Filing bankruptcy can grant debtors a fresh start by discharging debts. Chapter 7 bankruptcy aims to liquidate one’s debt, while Chapter 13 bankruptcy aims to reorganize it so you can make payments over a three- to five-year period. When a court discharges someone’s debt, creditors may no longer take action or pursue collection. If you are overwhelmed by debt and need to begin anew, contact Dixon & Johnston Law Office in Belleville, IL. Our experienced bankruptcy attorneys will help you understand your options and work toward the best possible outcome for you. We will also arm you with the knowledge of what debts cannot be discharged so you can make the right decision for your financial future. Be sure to act fast so that you can protect yourself and your assets.
Understanding Debts That Cannot Be Discharged by Bankruptcy
Following a Chapter 7 or Chapter 13 bankruptcy case, many debts will be discharged by the court. In these instances, debtors will no longer be personally liable for the debts. Consumer debts such as medical expenses, personal loans, and credit card bills are dischargeable. However, certain debts cannot be discharged. Creditors will still be able to collect payment on non-dischargeable debts regardless of the outcome of your bankruptcy case. There are numerous categories of debt that cannot be discharged. Some of these categories can never be discharged, while others are subject to a court hearing.
Debts That Can Never Be Discharged
Many debts are always non-dischargeable, barring extraordinary circumstances shown by a debtor. Chapter 13 bankruptcy can eliminate some of these debts. However, debts that cannot be discharged by filing Chapter 7 bankruptcy include:
Unscheduled debts, which include any debts not listed on the bankruptcy petition or mailing list, unless the creditor had notice or knowledge of the bankruptcy filing:
- Certain taxes
- Debts owed to a former spouse or child as a result of divorce
- Child support or alimony
- Attorney fees in child custody or support cases
- Debts to government agencies
- Court fines or penalties
- Most student loans
- Debts for personal injury or death caused by drunk driving accident
- Debts that were non-dischargeable in a previous bankruptcy
- Debts owed to some tax-advantaged pension plans
- Debts for certain cooperative housing or condominium fees
Debts That Cannot Be Discharged If a Creditor Objects
Filing bankruptcy will not automatically except some debts from discharge. Creditors are required to ask the court to determine that certain debts are non-dischargeable. If creditors’ fail to do so or the court does not agree with the objection, however, the following debts will be discharged:
- Debts for credit card charges used to purchase luxury goods
- Debts from cash advances
- Debts from embezzlement or theft
- Debts that arose from willful and malicious injury
- Debts obtained by fraud
Contact Dixon & Johnston Law Office to Learn Your Options
Declaring bankruptcy can include a multitude of legal loopholes and procedures. Let the team of seasoned bankruptcy attorneys at Dixon & Johnston Law Office help get the best result for you. The bankruptcy court ultimately has the final say on debts that cannot be discharged. We will help you file Chapter 7 or Chapter 13 bankruptcy correctly and completely so that there are no grounds for denial of certain discharges. We will also offer suggestions for how you can best manage your debts and ways to find sound financial footing again. Contact our office in Belleville, IL to learn more.