What Types of Debt Cannot Be Discharged Through Chapter 7 Bankruptcy?
If you have reached a point where you believe your only option to restore financial health is to file for bankruptcy, you may be wondering how much of the debt you’ve accrued will qualify for discharge in a Kentucky bankruptcy. In fact, nearly all forms of debt are eligible to be forgiven, but it is important to know which forms of debt will remain your obligation to pay even after your bankruptcy is concluded.
Generally, bankruptcy cannot directly help with the following debt-related issues:
*Child support or maintenance: If you’re obligated to pay maintenance to a former spouse, or monthly child support to children who reside with their other parent, then those payments will still be due in the amount established in a court order after your bankruptcy.
*Repossession: Your Chapter 7 bankruptcy may result in the discharge of secured debts, including mortgages or car loans, but it cannot prevent repossession of those items. What this means is that you will not owe any money on your car, but bankruptcy doesn’t bar the lender from also taking the car back. In a Chapter 13 bankruptcy, however, you can stop repossession or foreclosure by rolling past due payments into your debt adjustment plan.
*Fines, judgments, or penalties resulting from criminal acts: If you’ve been convicted of a crime in Kentucky and had penalties or fees imposed by the court for that crime, such as traffic tickets or criminal restitution, those debts aren’t forgiven in bankruptcy. The Bankruptcy Code also specifically provides that, if you’ve been sued for personal injuries or death caused when you drove drunk, the civil judgment entered against you can’t be forgiven through bankruptcy.
*Tax debts: Generally, money you owe to the IRS is not dischargeable in bankruptcy. However, older tax debts may be eligible for discharge, and an attorney can help you determine if yours qualify.
*Student Loans: Again, the government asserts that student loans aren’t dischargeable, but there are exceptions under the law that do allow for forgiveness of debt relating to your education.
Under the Bankruptcy Code, certain forms of debt are, by default, not dischargeable, but may qualify for discharge under certain circumstances. It is for this reason and many others that finding the right attorney can make an enormous difference in your bankruptcy case. Not only are you assured a better chance of a successful petition than if you file by yourself, but you will also have the best chance of moving forward without any lingering debts.
If you are considering filing a petition for bankruptcy under Chapter 7 in Central Kentucky, consult with an experienced attorney to determine how best to move forward by calling Bowling Green bankruptcy attorney Lanna Martin Kilgore for a consultation on your claims, at 270-846-3700.