WHAT DEBTS ARE NOT ERASED BY A BANKRUPTCY?

  • Any debts you forgot to list in your bankruptcy papers, unless the creditor knew of your bankruptcy.
  • Child support and alimony
  • Debts for personal injury or death caused by your intoxicated driving
  • Student loans from government, non-government and profit-making organizations, unless it would be an undue hardship for you to repay.
  • Fines and penalties imposed for violating the law such as traffic tickets and criminal restitution
  • Recent income tax debts and all other tax debts. You can discharge debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are met:
    1. You do not have a tax lien against your property. If all other conditions are met, the taxes may be discharged, but even after your bankruptcy, the lien remains against all property you own, effectively giving the IRS a way to collect.)
    2. You did not try to evade paying your taxes or did not file a fraudulent return.
    3. The liability is for a tax return filed at least two years before you file for bankruptcy. Not a Substitute or Return.
    4. The tax return was due at least three years ago.
    5. The taxes were assessed and you received notice of this from the IRS at least 240 days (8 months) before you filed for bankruptcy.

If you filed for Chapter 7 bankruptcy, the above debts will still remain after your bankruptcy is completed. If you filed for Chapter 13, the debts will be included in your plan and you will be repaying them along with your other debts. If you do not pay them in full during your Chapter 13 plan, you will still have a remaining balance at the end of your case.

Your creditors may contest your request to discharge the following debts in Chapter 7 bankruptcy. These debts may be discharged in a Chapter 13, you can include them in your plan and at the end of your case the balance is wiped out.

  • Debts you incurred on the basis of fraud which includes lying on a credit application, making purchases on credit of $500 or more for luxury goods or services made within 90 days of filing, loans or cash advances of $750 or more taken within 70 days of filing.
  • Debts that resulted from willful or malicious injury to another person or property.
  • Debts from embezzlement, larceny or breach of trust.
  • Debts you owe under a divorce decree or settlement unless after a bankruptcy you would still not be able to afford to pay them or having them discharged is more beneficial to you than the detriment of having your ex-spouse pay them.



Back