Bankruptcy gives people a fresh start. Both Chapter 7 and Chapter 13 allow those who file a chance to discharge – permanently eliminate – many types of debt. Some types of debt are dischargeable in Chapter 7 and Chapter 13 cases, while some types of debt are only dischargeable in Chapter 13 cases. Some types of debts are dischargeable only if a debtor or creditor meets certain legal requirements while other types of debt are never dischargeable in bankruptcy.
A discharge releases a bankruptcy filer, i.e., debtor, from personal liability for certain specified types of debts. A debtor is no longer legally required to pay any debts that are discharged in a bankruptcy case. Once those who file bankruptcy receive their discharge, they are in possession of a valuable legal mechanism – a permanent order that prohibits their creditors from taking any form of collection action on discharged debts, including legal action, as well as personal, telephonic, and electronic communications with the debtor.
The Morrison Law Group offers free consultations so determining those debts that are dischargeable in any person’s individual bankruptcy case is easy. There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13. The following is a list of those debts that are never dischargeable in bankruptcy.
- Spousal maintenance (alimony).
There is a strong public policy of not allowing those who are delinquent on paying domestic support like alimony and child support to escape their legal obligations. A Chapter 13 case filing and plan of reorganization is an option for repaying delinquent spousal and child support.
- Child support.
Child support is always a non-dischargeable debt in a bankruptcy case. Delinquent fathers and mothers may not rid themselves of making past due domestic support payments by filing a bankruptcy case. Any wages that are being garnished for current or past due child support obligation will not be barred by the automatic stay and the bankruptcy filing.
- Certain tax debt.
Any recent income tax debt may not be eliminated by filing a bankruptcy case. However, like a domestic support obligation, bankruptcy debtors are legally permitted to utilize a Chapter 13 repayment plan to repay any non-dischargeable income tax debt. Like student loan debt, back taxes survive a Chapter 7 bankruptcy filing but older income tax debts may be discharged in a Chapter 7 bankruptcy case if certain requirements are met.
- Debts related to liens.
Secured debts such as those related to a mortgage, purchase-money security interest, or federal tax lien are treated differently by federal bankruptcy law since they are related to a specific piece of property, such as a home or motor vehicle. Any debtor who stops making a car payment will have a car repossessed since it would be akin to keep the car after stopping payment because of a Chapter 7 bankruptcy filing.
- Debts arising from a DUI that caused death or injury/Restitution for criminal acts
Like child support and alimony, these are public policy exceptions to discharge.
- Unscheduled debts.
Debts that are not properly listed on a debtor’s bankruptcy documents may not be discharged. An experienced bankruptcy attorney may help any debtor easily avoid this problem. Acquiring a credit report and conducting an extensive investigation is just one way that the Morrison Law Group ensures that their clients never experience this problem.
A former “National Bankruptcy Attorney of the Year,” Theron Morrison leads the Morrison Law Group, one of Utah’s most respected law firms, in assisting thousands of Utah residents to solve financial problems by filing bankruptcy. We offer debt relief services related to chapter 7 and chapter 13 bankruptcy, workouts, delinquent taxes, loan modifications, short sales, student loans, and defending the residents, consumers, and taxpayers of Utah against illegal collection. Contact the Morrison Law Group today at 801-456-9933 to consult with an experienced bankruptcy and debt solution attorney.
