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Bankruptcy > Filing Bankruptcy: Dischargeable Debts Vs. Non-Dischargeable Debts
Filing Bankruptcy: Dischargeable Debts Vs. Non-Dischargeable Debts |
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When filing bankruptcy, it is important to know how many of your debts will actually be dischargeable. There are some debts which you are required to pay even if you meet all Chapter 7 bankruptcy criteria. Take a look at which of your own debts may or may not be dischargeable, to help you decide whether or not you should consider filing bankruptcy. Dischargeable Debts Dischargeable debts are those that will be 'forgiven' after you file for Chapter 7 bankruptcy and it is discharged -- in other words, filing bankruptcy will allow you to get out of paying these debts. These are usually unsecured debts. They include: Credit card debt Loans (unless they are mortgage loans, car loans, or other secured loans) Collections from unpaid leases, car accidents, older unpaid taxes or tax penalties, and judgments that have been awarded against you. Medical bills Debts incurred due to business expenses Non-Dischargeable Debts Non-dischargeable debts are those that will NOT be 'forgiven' after you file for Chapter 7 bankruptcy and it is discharged. You will still have to pay these debts after filing bankruptcy. They include: Student loan debt Newer unpaid taxes Child support/alimony Restitution Money owed to DWI/DUI victims or their families Any dischargeable unsecured debt that you did not list on your bankruptcy schedules. There are also times when debts may or may not be dischargeable after filing bankruptcy. The most frequent is when a creditor challenges your filing because they believe that your use of their card was fraudulent. This is usually when they feel that you made charges on the card that you knew you would not be able to pay off (or knew that you would have a very hard time doing so). This may happen if you charge up the cards and then file bankruptcy soon after, if you used the cards while you didn't have a job, or if you bought high-dollar items while having a low-paying job. In this case, your fate will likely depend on how good your bankruptcy lawyer is at convincing the judge that you made the purchases in good faith, because you thought their was a strong possibility that you would be able to repay the debt. So, if you used the cards when you were unemployed, you lawyer needs to make a very strong case that you had good reason to believe that there was a great job offer on the horizon. The only time your coffin may be sealed is when you use the cards after consulting with a bankruptcy lawyer. Doing this proves that you spent the money when you knew you would be filing bankruptcy. Before you make a firm decision about filing bankruptcy, you should consider all your options and all the possible outcomes of those options. Determine which debts may be dischargeable and if that amount is large enough for you to use your one get-out-of-jail-free card for the next decade. More than anything, be realistic about what may or may not happen and decide if that is a gamble that you are willing to take. Learning all that you can about filing bankruptcy and consulting a good lawyer will help you make an informed decision that will be more likely to go your way. |
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