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:
- Have made a reasonable effort to pay your student loan debt
- Would not be able to maintain a minimum standard of living while paying
- 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