Bankruptcy provides a great opportunity for Florida residents struggling with the burden of debt to make a fresh start.
That’s the good news. The bad news is not all debts are dischargeable in bankruptcy. Before you file bankruptcy, it is important to know what debts can and cannot be discharged.
The answer can depend on the type of bankruptcy
There are a total of 19 different categories in the U.S. Bankruptcy Code of debts that cannot be discharged in bankruptcy. The specific debts depend on the type of bankruptcy you file.
A Chapter 7 bankruptcy discharges all your qualifying debts, while a Chapter 13 bankruptcy allows you to pay off your debts through a court-ordered payment plan.
Debts that are never dischargeable
However, there are some debts that are not dischargeable in both a Chapter 7 bankruptcy and a Chapter 13 bankruptcy. These include:
- Child support
Liens on your property are also not dischargeable. Although the debt that resulted in the lien is dischargeable, the lien itself is not. This includes tax liens.
Generally, any eligible debts you acquire after filing your bankruptcy petition are not dischargeable. If you convert your Chapter 13 to a Chapter 7 bankruptcy, you may add those debts to your Chapter 7.
Debts you forget to list in your petition
You must list all your qualifying debts on your bankruptcy petition. This is a very important rule to remember, because if you fail to include a debt, it will be not be discharged.
Before you file for bankruptcy, you should obtain a copy of all your credit reports to view all of your current debts. You do not want to be stuck with a debt simply because you missed it when filing your bankruptcy petition.
Guiding you through the process
These are just some examples of the most common debts that are not dischargeable in bankruptcy. There are other nondischargeable debts, which may or may not apply to your case, and potential exceptions to the discharge rules.
The bankruptcy code is complex and figuring out if your debts can be discharged can be challenging. It is helpful to have the help of an experienced bankruptcy attorney.