Some people considering filing for a Chapter 7 bankruptcy may assume that, when it is over, they will be completely debt free. However, this is not necessarily the case. While most debts are eligible for discharge, the U.S. Bankruptcy Code lists a few non-dischargeable Chapter 7 debts that consumers will most likely have to pay off, regardless of their situation.
A handful of debts unlikely to be discharged in a Chapter 7 bankruptcy include the following:
- Student loans
- Income taxes (federal, state, and local)
- 401K loans
- Court fines and penalties
- Child support and alimony
- Damages owed in a DUI case
If a creditor files a complaint objecting to the discharge, that debt may also not be dischargeable. Common examples include debt from fraud, luxury goods purchased within 90 days before filing, or a divorce settlement.
Additional considerations
Even if a debt is generally considered dischargeable, there is a chance that it will not be discharged in your particular case. A discharge may be denied in certain circumstances such as, for instance, the court finds that a filer failed to produce the necessary financial records or committed perjury.
Reaffirming certain debt
Generally, it is much easier to discharge an unsecured debt than a secured debt, as secured debts are usually attached to property. However, you may be able to keep the secured property if you come to an agreement with your creditor or reaffirm the debt.
Chapter 7 bankruptcy may seem like the only way out of debt, but it is not always the answer. A Florida attorney specializing in bankruptcy law can help you decide whether it is in your best interest to file for bankruptcy or pursue other debt relief options.
