What is Non-Dischargeable Debt When Filing for Bankruptcy?

When you file for bankruptcy, there are particular debts that you aren’t responsible for once you’ve filed. These debts are referred to as “dischargeable” debts. However, some debts do not go away after filing for bankruptcy. These types of debts are referred to as “non-dischargeable.” You must pay back all or part of non-dischargeable debts, even after your file for Chapter 7 or Chapter 13 bankruptcy. Below, we discuss what non-dischargeable debts are and how they can impact your life after filing for bankruptcy.

The Difference Between Dischargeable Debts and Non-Dischargeable Debts

Dischargeable debts are debts that will dissolve when you file for bankruptcy. You won’t need to pay them back. Collectors also cannot contact you or attempt to collect dischargeable debts from you. On the other hand, non-dischargeable debts don’t go away after you’ve filed for bankruptcy. You’ll be responsible for paying back these debts using a court-ordered payment plan.

Examples of Non-Dischargeable Debts

There are 19 different types of non-dischargeable debt categories. Non-dischargeable debts include the following:

  • Debts acquired after filing for bankruptcy
  • Child support
  • Spousal support
  • Criminal penalties (such as traffic tickets and fines)
  • Government-funded student loans
  • Back taxes
  • Luxury items (such as cars, boats, and jewelry) purchased within 90 days of filing for bankruptcy
  • Cash advances on credit card debt

Factors that Determine Non-Dischargeable Debts

What is considered a non-dischargeable debt may depend on the type of bankruptcy you file. For instance, certain types of settlement debts relating to divorce proceedings may be dischargeable if filing for Chapter 13 bankruptcy but are non-dischargeable if filing for Chapter 7 bankruptcy.

Debts can be discharged based on individual circumstances regarding your case, such as failing to disclose debts when you initially filed or willfully denying court orders regarding bankruptcy proceedings.

You can appeal to have a particular debt discharged when filing for bankruptcy, even if the debt is normally non-dischargeable. For example, student loan debts are usually non-dischargeable. However, if you provide documentation that paying your student loans would make you unable to pay for basic needs like food, shelter, and living expenses, a bankruptcy judge may discard the debt at their discretion.

Should I File for Bankruptcy if It Won’t Eliminate All My Debt?
It often makes sense to file for bankruptcy even if it does not eliminate all your debt payment commitments. Bankruptcy can help you and your family get back on your feet and lower the debt you currently owe. Filing for bankruptcy will also limit calls from collection agencies. To see whether filing for bankruptcy is the right option for you, speak with an experienced bankruptcy attorney.

Badgley Law Group: Bankruptcy Lawyers in Central Florida

Our team at Badgley Law Group can help you determine whether bankruptcy is the best choice in your current situation and help you through the process of filing for bankruptcy. Call our office at 407-781-0420 for a free consultation to discuss your bankruptcy options and determine the best choice for you and your family.

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