Bankruptcy covers most debt but it does not address every single debt out there. So what debt survives bankruptcy?  Some of the debts listed in this article may only be discharged in your bankruptcy case under certain circumstances. Other may only be included in rare and special cases, or not at all.  It’s important to speak with an experienced bankruptcy lawyer before you file bankruptcy so you have a better understanding of the outcome of your bankruptcy.  This is a common list of debts that will fall into this category:

  • Taxes: Income tax debt will not be discharged in your Chapter 7 bankruptcy unless:
    • The income tax is more than three years old
    • If the tax return was filed timely
    • The tax return was correct when filed
    • If the tax return was filed late, but filed more than two years prior to filing the bankruptcy, the tax may be dischargeable if all other requirements are met.  A bankruptcy attorney can determine whether or not your tax debts are dischargeable in bankruptcy.
  • Student Loans: Any governmental, non-profit or any other loan educational loan as defined by the Internal Code is non-dischargeable unless payment would impose an undue hardship on the debtor. The 2005 bankruptcy code has broadened this exception to discharge. Student loan debt in the majority of current bakruptcy cases will survive the bankruptcy.
  • Child Support and Alimony: Child support and alimony cannot be discharged by filing a bankruptcy. Bankruptcy laws provide heightened protection for individuals owed “domestic support obligations,” or DSO’s. DSO’s are debts that accrue before, on or after the day the bankruptcy is filed and are owed to or recoverable by a spouse, former spouse, or child of the bankruptcy petitioner, or a governmental unit.
  • Marital Debts: Debts that happened in the course of a divorce or separation agreement cannot be discharged in a Chapter 7 bankruptcy. The 2005 bankruptcy code eliminates the requirement that the creditor file a complaint to determine whether the debt is dischargeable.
  • Operating Vehicle while Intoxicated: Debts for personal injury or death caused by driving while intoxicated are not dischargeable in bankruptcy.
  • Intentional Torts: Debts resulting from a willful or malicious act may not be discharged. Debts resulting from intentional torts and debts incurred by fraud are presumably dischargeable. In this type of situation, the creditor must file a request with the court to have the debt declared non-dischargeable.
  • Court Fines and Citations: Fines for violating the law are non-dischargeable debts. Examples of this type of non-dischargeable debt include traffic tickets and court-ordered criminal restitution.
  • Fraud: Debts incurred through a fraudulent act, under false pretenses or false representations are non-dischargeable. The creditor is obliged to request a determination of dischargeability based on the alleged fraud. The bankruptcy judge will then rule on whether the debt is discharged after notice and a hearing. Consumers facing allegations or bankruptcy fraud may want to call upon the services of a bankruptcy attorney. (List by Total Attorney)

As you can see from this list there are a number of kinds of debt that my not go away in a bankruptcy case.  So in your case what debt survives bankruptcy…again this a question I cannot answer until you have retained my firm but rest assured we will discuss each of this if appropriate prior to filing your case.

So why should you care what debt survives bankruptcy?  Well if your only debt is student loan debt and its not going to go away by filing bankruptcy then bankruptcy might not be your best option.  Make sure you know your options prior to filing a bankruptcy.  In Utah call the team at the Utah Bankruptcy Guy for a consultation to determine if bankruptcy is right for you.

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