Large debts can be incredibly frustrating, which is why many people consider
filing for bankruptcy. While it is true that bankruptcy can offer significant relief from high
financial obligations, not all debts can be eliminated, which is why it
is important to talk to an experienced attorney before pursuing this option.
Here are some examples of non-dischargeable debt:
Spousal and Child Support
Neither alimony nor child support is dischargeable in bankruptcy. If you
are having difficulty making payments due to a change in your circumstances,
you may be able to petition the family law court for a modification of
your original agreement.
Judgments Involving DUI
If you were successfully sued for damages following an accident in which
you were driving while intoxicated, the judgment is considered non-dischargeable.
Debt Obtained Through Fraud
Debt obtained fraudulently may be nondischargeable. For example, if a credit
card company can prove you lied about your income when you applied for
your card, the court may agree that your debt is non-dischargeable.
Most taxes are non-dischargeable, though there are limited cases in which
older income tax balances can be eliminated. There are strict qualifications
for an income tax discharge, though, such as the requirement that the
income tax return for a particular year's worth of debt must have
been filed on time.
In most cases, you won't be able to discharge private or government
student loan debt. There are exceptions, however, particularly if you can show the court
that it is unlikely that you'll ever pay off the debt and that continuing
to make payments presents a severe hardship for you and your family.
Bankruptcy May Still Be Worth It
Even if some of your debts are nondischargeable, you may still benefit
from filing for Chapter 7 or
Chapter 13 bankruptcy. Both options provide you with the automatic stay against creditor
harassment, and in discharging some debts, you may be able to free up
extra cash to pay down what you still owe. If you file for Chapter 13,
your non-dischargeable debts will be incorporated into your payment plan,
which may also make your finances more manageable.
Contact our office today to set up a consultation.