What Debts Cannot Be Discharged With Chapter 7 Bankruptcy


Anyone looking to file Chapter 7 bankruptcy should know what kind of debts that can actually be discharged. While there is often a misconception that all debt obligations are removed, the following will remain active, even once your other debts are discharged. Take a moment to review these items before you meet with a Chapter 7 bankruptcy attorney to ensure that your financial obligations are eligible.

As a rule, most debts from the judicial system aren't going to be eligible for removal through Chapter 7 bankruptcy. This means that things like Child Support, Alimony, Restitution, Court Fees and those associated with Fraud are not going to be removable through this form of bankruptcy.

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In addition to this, your taxes will not go away with this proceeding. That means if you owe State, Federal and local taxes, you will still be legally obligated to pay them after you have filed for bankruptcy. However, there are some cases where penalties and interest may be reduced or removed during this process.

Those with student loans may be discouraged when they are looking to go this route to help them with their debts. As a Chapter 7 bankruptcy attorney will tell you, there are some cases where you can discharge your student loans as long as you meet the following requirements:

Paying the student loans will cause a financial hardship that will result in a minimum standard of living not being met for the debtor and their dependents. This hardship will last for more than a significant period of the repayment period. A good faith effort has been made already to repay these debts prior to filing for bankruptcy.

Of course, other considerations can come into play with your Chapter 7 bankruptcy and it will be important that you speak with your lawyer to determine if your debts will be eligible. Student debts are an item that has a lot of variables in them and the discharge results can vary from one person to the next.

It will also be important that you understand that the following debts are not dischargeable through this process and in some cases, you may need more than a Chapter 7 bankruptcy attorney to help you with the legal process associated with them.

Cash advances and luxury purchases taken within 90 days of filing your claim. This is considered fraud. Debts that come from any malicious act. Any breach of fiduciary duty, embezzlement or larceny. Debts that you have the ability to pay for.

The decision to begin the bankruptcy process isn't one people often decide on lightly. This proceeding does remain on your credit history for seven years and it will leave a lasting impact on your credit. Make sure you understand all the factors that are in place for a Chapter 7 bankruptcy and work closely with an attorney to ensure that by the time the debts are discharged, you are only left with items that couldn't be discharged based on the law.


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