What Debts Cannot Be Discharged in Bankruptcy?

Filing for bankruptcy can give you a fresh start, wiping away debts that are far too big for you pay off in a reasonable timeframe. But bankruptcy has its limits, and you need to be aware of these before making a decision. There are several kinds of debt that you cannot discharge, and these will still have to be repaid in due time.

This is why having legal counsel is crucial. When filing for bankruptcy, legal professionals, like Christensen Young and Associates say that many oversights or misunderstandings can leave you in a worse financial position. What are the debts you need to watch out for and understand?

Debts that Can Never be Discharged

These debts are the absolute exception to bankruptcy; no matter what you do, they will stay on your record and need to be paid.

• Child Support Obligations
• Alimony Obligations
• Most Tax-Related Debts
• Fines and Penalties for Breaking the Law
• Debts Arising from Personal Injury or Death Cases

In many cases, however, you can seek a repayment plan for these debts to reduce the financial burden on you.

Nondischargeable Debts that Have Exceptions

Meanwhile, some debts can be discharged only if you prove that an exception applies. This is often difficult, as the applicable circumstances are extremely limited, but it is definitely an option worth exploring. The two kinds of debt that fall under this category are student loans and regular income tax debt.

Debts that Require a Successful Objection from Creditors

Lastly, there are some debts that would normally be discharged, but will stay if a creditor successfully proves that they should not be discharged. These include debts from your fraud, especially attempted bankruptcy fraud, and those caused by willful, malicious acts. Any debts that you do not properly list on your bankruptcy papers also fall under this category.

Bankruptcy is a useful tool if you are overwhelmed by debt, but you need to remember that it cannot solve everything. Make sure to discuss these nondischargeable debts with your lawyer, and find out if there is anything you can do.