Understanding non-dischargeable debts in Chapter 7 bankruptcy

On Behalf of | May 11, 2023 | Bankruptcy

Individuals struggling with overwhelming debt may find Chapter 7 bankruptcy to be a viable option.

However, it is important to note that the courts will not discharge all debts in bankruptcy. To consider bankruptcy as a debt relief option, understanding non-dischargeable debts is essential.

What are non-dischargeable debts?

Non-dischargeable debts refer to debts that debtors cannot eliminate in bankruptcy. This means that the debtor is still responsible for paying these debts after the bankruptcy process is complete. While some debts may be non-dischargeable in Chapter 7 bankruptcy, they may be eligible for discharge in Chapter 13 bankruptcy.

Examples of non-dischargeable debts

Non-dischargeable debts in Chapter 7 bankruptcy include:

  • Student loans
  • Certain taxes, such as recent income tax debt and property taxes
  • Debts resulting from fraud or willful misconduct, such as credit card fraud
  • Alimony and child support payments
  • Court fines and penalties
  • Personal injury or wrongful death judgments resulting from reckless behavior such as drunk driving or other reckless behavior

It is important to note that not all taxes are non-dischargeable, and some may be eligible for discharge if the individual filing meets certain conditions. Similarly, some personal injury or wrongful death judgments may be eligible for discharge if they do not result from reckless or intentional behavior.

Filing for Chapter 7 bankruptcy can provide relief for individuals struggling with overwhelming debt. Non-dischargeable debts can be a significant financial burden, but there are options available to manage them. By understanding non-dischargeable debts and seeking appropriate legal advice, debtors can make informed decisions about their financial future.