What Debts Can’t Be Discharged in a Chapter 7 Bankruptcy?

October 5, 2011 by  Filed under: Bankruptcy 

Filing for a Chapter 7 bankruptcy can provide the immediate financial relief you’ll need. Chapter 7 bankruptcies are relatively quicker than their more complicated Chapter 11 and Chapter 13 counterparts – and as you don’t have to undergo any repayment plans, you’ll immediately experience relief from your biggest debts.

However, that doesn’t mean that you’ll experience relief from ALL of your debts; in fact, there are exemptions to this rule that can ultimately determine whether or not you’ll file for Chapter 7 bankruptcy. If one of your biggest debts can’t be discharged by a Chapter 7, you and your bankruptcy attorney view other alternatives.

With this in mind, let’s take a look at the debts that can’t be discharged in a Chapter 7 bankruptcy.

Domestic Debts

If you’re drowning in a sea of child support payments, alimony payments and other forms of domestic support, then you may want to hold off on filing for Chapter 7 bankruptcy. Under no circumstances are these debts allowed to be discharged in a Chapter 7 bankruptcy, as these are domestic obligations to your current and former dependents.

Debts to the Government

If you owe on taxes or are suffering from sky-high student loan bills, a Chapter 7 bankruptcy may not give the respite you need. Under bankruptcy law, any debt that’s owed to the government cannot be discharged – and as a recent act made student loan debt a part of the government debt umbrella, this means that it is difficult to discharge them as well.

However, that doesn’t mean that the door is closed on your efforts to discharge your student loans. Bankruptcy courts do have the authority to discharge your student loan debts, but only if you can demonstrate that paying your loans will cause financial hardship to you and your family. For more information about discharging student loan debt, contact your bankruptcy attorney for more information.

Fines from Criminal Charges, Frauds and Lawsuits

Under no circumstances are you allowed to discharge debts that arose as a result of fraudulent activity (such as misleading tax returns). Additionally, bankruptcy courts won’t dismiss debts that you owe as a result of criminal activity. Finally, if you were subjected to a personal injury lawsuit and ordered to pay a fine, bankruptcy courts cannot discharge that debt

When it comes to discharging your debts, a highly-qualified and skilled bankruptcy attorney will help ensure that as much of your debt as possible is wiped clean.

Reed Allmand, sponsoring attorney for Bankruptcy.net, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit http://www.bankruptcy.net for up to date news and information you need to know.

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