What Debts are Not Dischargeable in Bankruptcy?

People file bankruptcy in an effort to eliminate debt and get a fresh financial start. While it is true that bankruptcy is a viable option for people who are struggling with significant debt that they cannot repay, it is a common misconception that bankruptcy will completely eliminate all debt.

There are certain types of debt that cannot be discharged, or eliminated, during bankruptcy. Some of these are outlined under Florida law, while other types are at the sole discretion of a bankruptcy judge. Below, our Florida bankruptcy lawyer explains in further detail.

What Debt Cannot Be Discharged By Law? 

The Florida Statutes outline many different types of debt that cannot be discharged during bankruptcy. These include:

• Overdue alimony obligations, child support, and other debts related to family support
• Damages or fines related to personal injury or death caused by impaired driving
• Student loans, although there is an exception if the debt would cause a hardship if repaid
• Penalties and fines for violations of the law, such as criminal restitution or traffic tickets
• Income tax debts and all other tax debts
• Debts not included in the bankruptcy filing

The above non-dischargeable debts are quite strict and clear, as they are written into the law. However, there are other debts that are left to the discretion of the judge to determine if they should be discharged during a bankruptcy case.

What Debt Can Judges Rule as Non-Dischargeable? 

There are many different types of debt a bankruptcy judge may rule as non-dischargeable. These are as follows:

• Debt incurred on the principle of fraud
• Purchases valued at $1,150 or more for luxury goods or services bought within 60 days of filing the bankruptcy petition
• Cash advances or loans valued at $1,150 or more obtained within 60 days of filing the bankruptcy petition
• Debts incurred due to malicious or willful injury to another person, or to someone else’s property
• Debt incurred due to larceny, embezzlement, or breach of trust
• Any debt owed as a result of a divorce settlement or decree, unless you would still not be able to repay them after bankruptcy

What Happens to Debt Not Discharged in Bankruptcy?

 The impact to you regarding debt not discharged in bankruptcy will depend on the type of bankruptcy you file. If you file Chapter 7 bankruptcy, you are still responsible for paying the non-dischargeable debt after your bankruptcy case is finalized. If you file Chapter 13 bankruptcy, you can include the non-dischargeable debt in your repayment plan. When using this option, you must repay them according to the terms of the plan. If the debt is not included in your plan, you must repay the debt after your bankruptcy case is finalized, just as you would in Chapter 7.

Our Bankruptcy Lawyer in Florida Provides Sound Legal Advice 

It is not always easy to determine which debts are dischargeable during bankruptcy and which are not. At Nowack & Olson, PLLC, our Florida bankruptcy lawyer can review the facts of your case and the debts you owe to determine which debts you can discharge and which you cannot. We will also guide you through the process to give you the best chance of a successful outcome. Call us now or contact us online to schedule a consultation and to get the legal advice you need.

Source:

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