Can I Discharge All My Debt in Chapter 7 Bankruptcy?

Posted By Steven Packard, Attorney at Law || 9-Jun-2016

As you probably know, there are different options when it comes to bankruptcy. These options are often referred to under the chapter of the United States Bankruptcy Code that explains them. Common forms of bankruptcy include Chapter 7, Chapter 11, and Chapter 13 bankruptcy.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy—also known as “straight bankruptcy” or “liquidation bankruptcy”—is what most people think of by default when they think about bankruptcy. In order to qualify for Chapter 7 bankruptcy, an individual must qualify under the Chapter 7 “means test.” This test ensures that the potential filer is actually under financial duress, and is not simply trying to get out from debts that he / she has the means to pay. Under Chapter 7 bankruptcy, an individual is able to liquidate their property and discharge their debts.

Debts That Cannot Be Discharged in Chapter 7 Bankruptcy

Unfortunately, not all debt can be discharged—even in a Chapter 7 bankruptcy. There are exemptions that can be used to keep some property, and there are also exemptions to debts that can be discharged. Some debts are considered automatically non-dischargeable. Others can become non-dischargeable if a creditor makes an objection.

These are just some of the examples of non-dischargeable debts:

  • Past due child support
  • Divorce property division debts
  • Homeowners association fees
  • Some attorney fees
  • Debts in a personal injury lawsuit that involved drunk driving
  • Some forms of tax debt
  • Spousal support / alimony debt
  • Some types of “luxury” credit card purchases made within the previous 90 days before filing bankruptcy
  • Debts resulting from causing injury to another individual
  • Debts resulting from knowingly defrauding another individual
  • Debts that the filer did not include in his / her bankruptcy petition

Are Student Loans Non-Dischargeable?

In most cases, student loans cannot be discharged in a bankruptcy proceeding. There may be a chance that you can discharge your student loan debt, if you are able to provide that you:

  1. Have made a reasonable effort to pay your student loan debt
  2. Would not be able to maintain a minimum standard of living while paying these debts
  3. Face a financial situation that most likely won’t change in the immediate future

Questions About Debt & Bankruptcy? Call Attorney Packard!

It’s important to know your options. In these situations, the value of an experienced Beaumont bankruptcy lawyer cannot be overstated. Contact Steven Packard, Attorney at Law to learn more about dischargeable debts and get answers to common questions.

Beaumont Bankruptcy Attorney

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Steven Packard, Attorney at Law
Beaumont Bankruptcy Attorney
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Beaumont, TX 77701
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