What Debts are not Discharged in My Chapter 7?
At the conclusion of your Plantation or Coral Springs Chapter 7 bankruptcy, most debts are eliminated or discharged. The bankruptcy code states that all debts are discharged except those listed as exceptions to discharge in Section 523 of the bankruptcy code. To be clear, the vast majority of debts are discharged but the exceptions can be divided into two buckets: 1) debts that are discharged as long as a creditor doesn’t object, and 2) debts that aren’t discharged even if a creditor doesn’t object. So what goes into the buckets?Chapter 7 Debts That are Discharged Unless an Objection is Raised
There are three types of debts that a Creditor can challenge:
- Debts that were incurred because you made a false representation or committed fraud in order to obtain the loan. Common uses of this objection is that you stated an intentional lie on a loan application; taking a cash advance or using your credit card when you already knew you were going to file bankruptcy or otherwise had no intention of paying back that credit; or any other deceitful action when incurring a debt.
- A debt incurred because of theft or embezzlement; examples include fraud while serving as a trustee in a trust relationship. This includes misappropriating money or property while in that relationship. Other examples include stealing from an employer, cheating a business partner, or instances of elderly abuse such as convincing elderly relative to makes changes to his or her will in your favor.
- A financial obligation that results from intentionally and/or maliciously harming a person a business or its property. Some examples of this are financial obligations incurred due to bodily injury or property damage that you intentionally caused (domestic disturbance, bar fights, street fights, etc).
Whoever has a claim against you for any of these must file an adversary proceeding to determine discharge ability. An adversary proceeding can best be described as a “lawsuit” within your bankruptcy. They must file their proceeding within 60 days of the 341 meeting or that debt is discharged. The usual attorney fees do not cover adversary proceedings so make sure that you don’t forget to tell your bankruptcy attorney if any of those situations exist.Chapter 7 Debts That are not Discharged - No Matter What!
The following types of debts are not discharged under Chapter 7 bankruptcy:
- Criminal fines, fees to a government agency and court-ordered restitution
- Some categories of taxes (this is usually trust account taxes such as payroll taxes, sales tax, etc)
- Child support, spousal support and maintenance will not be discharged
- At the time of this writing, student loans are effectively not dischargeable but congress is taking a look at changing this (we will keep our fingers crossed!)
- Personal injury claims that resulted in bodily injury or death from driving a vehicle, boat, or aircraft while intoxicated
Don’t guess about what is dischargeable or not. Our Cooper City bankruptcy office is conveniently located just miles from Pembroke Pines, Miramar, Hollywood, Davie and Weston.
Take advantage of our free consultations and book one online today.