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What are Non-Dischargeable Debts?
Are you struggling each month to make ends meet? Do you worry about how you will pay the light bill and put food on the table? If so, filing for might be the answer.
Very few debts are considered non-dischargeable debts under the . Therefore, you might be to get rid of all your by filing a .
Even if you do not have the money to , you can still receive debt relief from the . Contact our office to discuss how we can help you file Chapter 7 .
is a non-profit organization dedicated to helping low-income individuals in financial distress get a fresh start through Chapter 7 bankruptcy. Our services are provided to qualified individuals at no cost.↑ Back to top
Student Loans are Non-Dischargeable Debts in Bankruptcy
Most debts are dischargeable in a bankruptcy filing. However, a few debts are considered non-dischargeable debts because of the type of debt owed to the creditor.
For instance, debts that are typically eligible for discharge include such as , credit card debts, personal loans, and old utility bills. However, student loans are included in the category of non-dischargeable debts.
Non-dischargeable debts survive the bankruptcy filing. Therefore, if you owe , you will continue to owe the student loans even though you file a Chapter 7 bankruptcy case.
While most student loans are considered non-dischargeable debts, there are some instances in which a debtor can discharge student loans. However, the requirements for turning non-dischargeable debts for student loans into a dischargeable debt are difficult to meet.
You must prove that paying the student loans will create a hardship that prevents you from meeting your basic needs. You must also prove that your current financial situation is expected to continue indefinitely.
If you can prove these two requirements, you must also prove you made a good faith effort to repay the non-dischargeable debts. Since many people are behind on their student loans when they file for Chapter 7 relief, they are unable to prove all required elements to get rid of student loans in a bankruptcy case.↑ Back to top
Most Income Taxes are Non-Dischargeable Debts in Bankruptcy
As with student loans, most are considered non-dischargeable debts. Most income taxes are priority unsecured debts, meaning they must be paid in full even though you file for debt relief under Chapter 7.
However, as with student loans, some income taxes might be dischargeable in Chapter 7. The age of the debt is the main factor in determining whether income taxes are considered non-dischargeable debts or dischargeable debts.
Income taxes must be at least three years old to be considered dischargeable. In addition, the tax returns must have been filed at least two years before the filing of the bankruptcy case, and the IRS must have assessed the income taxes at least 240 days before the filing date of the Chapter 7 case.
If the IRS can prove any fraud or tax evasion on your part, the income taxes remain non-dischargeable debts regardless of the age of the debt.↑ Back to top
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Alimony and Child Support are Non-Dischargeable Debts in Bankruptcy
are always considered non-dischargeable debts in bankruptcy. You cannot get rid of past due domestic support payments by filing a bankruptcy case.
If you are behind on child support and alimony, you can include these non-dischargeable debts in your . As long as you remain current on all future payments for these non-dischargeable debts, you can pay the past due portion through the .
In a Chapter 7 bankruptcy case, non-dischargeable debts for alimony and child support must be paid. The bankruptcy filing will not prevent for contempt if you do not pay these debts.↑ Back to top
Secured Liens are Non-Dischargeable Debts in Bankruptcy
are treated differently in a Chapter 7 bankruptcy filing. You must pay the payments to a secured creditor or surrender the collateral in satisfaction of the debt.
While secured liens are not dischargeable in a Chapter 7 case, if you surrender the collateral, the creditor cannot pursue you for any balance owed on the account.↑ Back to top
Other Non-Dischargeable Debts in Bankruptcy
There are a few other categories of non-dischargeable debts in a Chapter 7 case. Many of these non-dischargeable debts are rare and do not apply in most Chapter 7 cases. Examples of in a Chapter 7 bankruptcy case include:
Other government loans such as fines and penalties
Restitution for criminal acts
Debt arising from fraud or false pretenses
Debts you did not include in your bankruptcy forms
Damages related to a DUI accident
Why Should I File Bankruptcy if I Owe Non-Dischargeable Debts?
Even though you might owe a few non-dischargeable debts, this does not mean that you should not file for debt relief under . Many debtors who have non-dischargeable debts find that it is much easier to pay these debts after getting rid of their other unsecured debts.
For instance, if you owe student loans or income taxes, you might be able to reach an agreement with these creditors for an affordable payment plan after bankruptcy. Without worrying about paying credit card debts, medical bills, and personal loans, you may have the disposable income to pay the non-dischargeable debts.
Furthermore, ignoring all your debts because you have non-dischargeable debts is not prudent. Your unsecured creditors may or request to collect unsecured, dischargeable debts.
You can prevent , including and debt collection lawsuits, by filing for debt relief under Chapter 7. You might have one or two non-dischargeable debts that you must deal with after receiving your Chapter 7 discharge, but at least you won’t need to worry about the thousands of dollars in dischargeable debts you were able to get rid of in a .↑ Back to top
Are You Ready to Get Rid of Your Unsecured Debts?
If you are unsure whether you have any non-dischargeable debts, we can help. As you go through the process of preparing your , we guide you through determining whether your debts are secured, unsecured, or .
We do not expect you to because you are not a bankruptcy attorney. Therefore, we have developed a process that helps you determine the category for your debts. You complete the , but you have someone to turn to if you have questions.
If you need a fresh start, click to start Upsolve's free bankruptcy process. Join the millions of other Americans who have discharged their debt through Chapter 7. You will be glad you did.
If you still are not convinced, videos of our past users who worked with Upsolve to file for Chapter 7 bankruptcy relief. Together, we were able to help them eliminate their debts while protecting their property and income. They are now on the road to a brighter financial future.
They got a fresh start to recover and rebuild after a financial crisis. You deserve the same chance. Start your journey on the road to financial well-being today by contacting our office to begin your .↑ Back to top