When you are filing for bankruptcy, you can become confused about the process very easy. Bankruptcy is a complex topic, which is one of the reasons it is recommended that you have a qualified and experienced bankruptcy attorney to help guide you through the process. Our guide here is designed to help you understand one of the most important aspects of bankruptcy: Which debts cannot be discharged.
What Is A Dischargeable Debt?
When someone refers to a “dischargeable” debt in bankruptcy, they mean that a debtor is no longer obligated to repay that debt. If a debt has been discharged, creditors can no longer do any of the following:
- Call the debtor
- Send letters
- Pursue lawsuits.
Limitations to Dischargeable Debt
Although most actions are halted immediately, creditors are still allowed to pursue specific actions against the debtor even if a debt has been discharged. For instance, creditors can pursue any liens that were previously attached to an unpaid debt. If you put any property up as collateral, it can still be repossessed.
Types of Debt Likely to be Discharged
Most of the debt will fall under the category of dischargeable debt for most people who are eligible to file for bankruptcy. Here are the types of debt that can be discharged after you file bankruptcy:
- Credit card bills
- Medical debt
- Judgments
- Personal loans
- Most types of unsecured debt
Non-Dischargeable Debt
Some debts will never be discharged in bankruptcy. Though most people go through bankruptcy hoping to have all their debts eliminated, some debts will continue to haunt them even after the bankruptcy process has been completed.
Domestic Support
Your obligations to domestic support include child support and alimony. These types of obligations cannot be discharged as a result of bankruptcy.
Most Taxes
If you are wondering if your tax debts can be discharged after a bankruptcy, the answer is that most of them cannot even if you are bankrupt. But you may be able to have some of them discharged. You have to pay them for most taxes after filing for Chapter 7 bankruptcy, and you have to make new payment arrangements for them after filing Chapter 13.
If you are three years or more behind in paying your federal income taxes, you may be able to have those taxes discharged. But for those taxes to be discharged, you must have filed a tax return without resorting to fraud or other evasive tactics.
Debts Caused by Purposeful Injury
If you deliberately caused an injury to another person or their property and owe the debt because of it, you will not be able to discharge the debt under Chapter 7. If you file for Chapter 13, any purposeful injury to property can be discharged, though injury to people cannot be discharged.
Court Fees and Criminal Fines
If you were found guilty of driving under the influence and owe fines because of it, you will not be able to have those debts discharged through bankruptcy. This applies to alcohol as well as other types of substances.
Any other type of fine that you owe due to your crime involvement cannot be discharged.
Other Debts That Cannot Be Discharged
Retirement loans cannot be discharged because of bankruptcy. Any debts that you have but did not list when you filed for bankruptcy cannot be discharged. They may include any debts that occurred from homeowners’ association fees or condo fees charged with after you filed for bankruptcy. Check out the link for more categories of non-dischargeable debt.