Are My Debts Dischargeable?

Are you currently considering a bankruptcy filing and only now learning that some debts are not dischargeable? If so, you are likely wondering about the status of your debts and whether or not they would be eligible for discharge in a bankruptcy case. Most types of debts that are common for consumers, and even for many businesses, are eligible for discharge in bankruptcy cases (businesses, however, do not have debts discharged in Chapter 7 as individuals do). At the same time, there are a series of debts identified in the US Bankruptcy Code as “exceptions to discharge,” which either cannot be discharged in a bankruptcy case under any circumstances, or can only be discharged if additional requirements are met.

If you are wondering if your debts are dischargeable, the best way to find out is to get in touch with a bankruptcy lawyer in West Palm Beach. In the meantime, the following are common types of debts and information about their dischargeability.

Credit Card Debt

Credit card debt is almost always dischargeable as long as the charges were not made very close to the date of the bankruptcy filing and do not constitute “luxury” goods or services. You should generally anticipate that credit card debt, as well as related personal loan debt, will be dischargeable.

Medical Debt

Medical debt is almost always dischargeable in bankruptcy cases.

Mortgage Debt

Mortgage debt, like medical debt, is nearly always eligible for discharge in bankruptcy cases. However, if you also want to keep your home and to catch up on your mortgage, you will need to file for a type of reorganization bankruptcy rather than liquidation bankruptcy.

Student Loan Debt

Although student loan debt is one of the listed “exceptions to discharge” under Section 523 of the Bankruptcy Code, it is important to know that this type of debt can be discharged if the debtor can prove that continuing to pay their loans would impose an undue hardship. For the last few years, the process for proving the undue hardship requirement has become much easier and more streamlined, and it is important to ask your lawyer about having student loan debt discharged if you have this type of debt and are considering bankruptcy.

Tax Debt 

Tax debt is a type of exception to discharge, but there are some circumstances in which personal income tax debt may be dischargeable. There are a series of specific requirements for being able to have this type of debt discharged, and you should discuss the details with a bankruptcy lawyer.

Family Support Debt

Family support debt, which includes child support and alimony or spousal maintenance, falls into the category of non-dischargeable debt. There are no circumstances in which family support debt can be discharged, and there are no exceptions to the rule. You should not expect to have this type of debt discharged.

Contact Our West Palm Beach Bankruptcy Lawyers for Assistance Today 

For individuals filing for Chapter 7 bankruptcy, the dischargeability of debts is particularly important. At the same time, debtors who file for reorganization bankruptcies under Chapter 13 or Chapter 11 can also be impacted significantly if they have certain debts that are considered exceptions to discharge. To ensure that your debts are dischargeable before you file for bankruptcy, it is important to speak with one of the experienced West Palm Beach bankruptcy attorneys at Kelley Kaplan & Eller as soon as possible. Contact us today to discuss the details of your debts and to find out more about moving forward with your bankruptcy case.

Source:

law.cornell.edu/uscode/text/11/523