Bankruptcy is a powerful tool. It has the power to discharge most of your debts. But some debts generally are not discharged. The most common debts that are not discharged through bankruptcy are domestic support obligations (child support and spousal support-alimony), taxes, student loans, and debts incurred through fraud. Each has specific rules in bankruptcy.
Spousal support and child support cannot be discharged through bankruptcy. Child and spousal support are matters for family courts. If you are unable to pay your spousal or child support you should go to family court and modify your spousal or child support order. If you are looking for a good family law lawyer, give me a call and I’ll be happy to refer you to the family law attorneys at our office.
Taxes are difficult to discharge because they have to be old. Taxes that are less than 3 years old cannot be discharged. There are some additional factors that must be met, but the age of the taxes are the greatest factor in whether or taxes are discharged.
Student loans are another type of debt that are generally not discharged. Years ago, many people used to file bankruptcy immediately after graduating from graduate school. By filing for bankruptcy they walked away from hundreds of thousands of dollars of school loan without making a single payment. As a result of people abusing the system, the laws were changed to make it virtually impossible to discharge school loans through bankruptcy.
Debts incurred through fraud are another type of debt that cannot be discharged in bankruptcy. But it is a little different than the rest because usually it is unclear whether or not fraud has been committed. If a person files for bankruptcy and a creditor claims fraud, the creditor must bring an adversary hearing in bankruptcy to ensure that its debt survives the discharge. An adversary hearing is basically a trial with discovery, at the end of which a judge makes a binding decision.
Bankruptcy is a powerful tool that can help you get a fresh start. But some debts may survive bankruptcy. If you have a question about whether or not your debt is dischargeable in bankruptcy give our bankruptcy lawyers a call and we’ll be happy to discuss your situation with you.