For many debtors, the weight of their debt can grow beyond what they are able to handle. Sometimes, filing a bankruptcy petition can be the most viable solution to their problems.
Bankruptcies all have different positives and negatives, making it necessary to fully understand what each form of bankruptcy will or will not discharge. Chapter 7 bankruptcies are an excellent tool for many debtors, but there are several kinds of debt that they cannot discharge.
A chapter 7 bankruptcy generally does not allow a debtor to discharge debt owed for spousal or child support, court fees, damages owed in DUI-related personal injury or wrongful death cases or penalties, fines or restitution owed to the government. Debts not originally listed when the bankruptcy petitions were filed, any debts deemed non-dischargeable by previous bankruptcy proceedings and any debts not discharged due to fraud also will not qualify under Chapter 7.
Some debts are unlikely to be discharged, but may qualify depending on the circumstances. For instance, most student debt is non-dischargeable, but exceptions may be made if repayment of the loans present an “undue hardship” to the debtor or the debtor’s dependents.
Similarly, most tax debt is not dischargeable, but exceptions may be made if the tax debt has been lingering for many years. There are also some debts to specific types of pension plans which may not be dischargeable, while other pension debts may be discharged.
Ultimately, it is useful to seek advice from an experienced bankruptcy attorney in order to make an informed evaluation of the situation. The details of each bankruptcy are different, and may be judged differently by the courts. With proper guidance, debtors can determine which kind of bankruptcy procedures are best for them, while keeping themselves and their rights protected.