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What Debts Go Away In Bankruptcy?


When people make the decision to file for bankruptcy, they are aware that some of their debts will be discharged in the bankruptcy process. Filing for bankruptcy allows debtors to have a financial fresh start by removing a great deal of debt that is overly burdensome. However many of the people who are considering filing for bankruptcy are confused regarding which debts are discharged and which debts will remain following the bankruptcy process.

Personal Debts That Do Not Go Away

Unfortunately, not every debt goes away in a bankruptcy process. In fact, many debts can remain following a debtor filing for Chapter 7 bankruptcy. These debts include child support payments, spousal support payments, and student loan debt. These types of debts are mandated by the courts and therefore are not dischargeable within a bankruptcy.

Debts Owed to Governmental Entities That Do Not Go Away

Additionally, there are other debts found in 11 U.S.C. §523 of the bankruptcy code that are nondischargeable. The bankruptcy code is clear that any debt owed to a municipality, county, city, state, or federal government is likely not dischargeable within a bankruptcy. This means that certain debts such as parking tickets, toll booth tickets, traffic tickets, or any other type of ticket issued by a governmental agency would not be dischargeable within a bankruptcy.

Debts Discharged in Bankruptcy

Although the debts listed above are typically not discharged in a bankruptcy, there are many debts that are eliminated through the bankruptcy process. Some of those debts include any type of consumer debt, medical bills, credit card debts, or many types of personal loans. Typically, the reason a person considers bankruptcy is to obtain financial relief regarding overwhelming debt. A Chapter 7 bankruptcy will allow a debtor to completely eliminate certain debts if they pass a means test showing that they have no disposable income at the end of the month. A Chapter 13 Bankruptcy will allow a debtor to keep all of the assets that they have, however, they will be required to restructure their debt into a reorganization plan that will extend their payments for 3 to 5 years.

Reach Out to Us Today for Assistance

If you are considering filing for bankruptcy you may feel overwhelmed at how complicated and challenging the bankruptcy laws are. You will likely be able to eliminate some of your debts in bankruptcy, however, you may not be able to eliminate all of them. We would welcome the opportunity to discuss your financial options with you. Please contact an experienced West Palm Beach bankruptcy attorney at Kelley Kaplan & Eller at 561-264-6850 today for a consultation to help you understand which debts may be discharged in your personal bankruptcy.




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