If you’re thinking about filing bankruptcy as a way of relieving your debt, it’s important to know what bankruptcy cannot do for you.
Many types of debt are not dischargeable in bankruptcy – that is, you’ll likely still be responsible for paying these debts even if you seek bankruptcy protection. Non-dischargeable debts include the following.
- Student loans: Student Loan Are not dischargeable.
- Taxes: Most tax debt is not dischargeable in bankruptcy. The exceptions have to do with the age of the debt, the timeliness of your tax filing and the correctness of your return. Because this one involves a solid understanding of the law, a good bet is to consult with a bankruptcy lawyer.
- Marital debts: Any money you owe as part of a divorce or separation agreement typically cannot be discharged by bankruptcy. Again, an attorney may help you figure this one out.
- Alimony and child support: If you owe support or maintenance money for children or a former spouse, you typically must pay it. DSOs, or Domestic Support Obligations, will usually not be discharged in bankruptcy.
- Citations and fines: Generally, any fines you’ve gotten for breaking laws or violating civil codes are your responsibility.
- Recent cash advances: “Last-minute” purchases of luxury goods from a single creditor are generally non-dischargeable in bankruptcy, especially if they:
- total more than $500
- were made within 90 days of the bankruptcy filing
Similarly, cash advances (including payday loans) of more than $750 taken out within 70 days of a filing are non-dischargeable.
- Intentional torts: Fines charged because of willful and intentional acts cannot be excused in bankruptcy. This is a legal-heavy issue, so make sure you have your bankruptcy lawyer explain it to you if you need clarification.
- Fraud: Debt you incurred from an illegal activity cannot typically be discharged by the bankruptcy court.
