Nahrgang & Associates, P.C
Bankruptcy Law: Which Debts Can Be Discharged in a Bankruptcy?
You may think of bankruptcy as the ultimate solution to your debt problems. Declare bankruptcy and all your debts will be eliminated, right? Unfortunately, that’s not the case. Some debts can be discharged by Chapter 7 or Chapter 13 bankruptcy; some can only be discharged by a Chapter 13 bankruptcy; others cannot be discharged at all. It helps to know what you’re getting into when you declare bankruptcy, so here is some information from the top bankruptcy lawyers at Nahrgang & Associates about which types of debt can be discharged in a bankruptcy:
Debts That Can Be Discharged in a Chapter 7 or Chapter 13 Bankruptcy
Most people use Chapter 7 of the U.S. bankruptcy code to deal with their debt. Under Chapter 7, many of your assets like your home will be liquidated to cover your debts. Chapter 13 is known as reorganization, and if you have enough income to qualify, you can retain certain assets that would be lost in a Chapter 7 bankruptcy while you pay off your debt. While there are some debts you will still be responsible for after declaring bankruptcy, Chapter 7 and Chapter 13 can discharge any of the following:
- Credit Card Debt
- Personal Loans
- Promissory Notes
- Medical Bills
- Lawsuit Judgements Against You
- Financial Obligations Under Leases and Contracts
Debts Dischargeable by Chapter 13 Only
Declaring Chapter 13 bankruptcy carries a number of advantages for those who qualify for it. In addition, Chapter 13 can discharge some debts that Chapter 7 cannot. These include:
- Marital Debts including Divorce Settlements
- Debt Incurred to Pay a Non-Dischargeable Tax Debt
- Court Fees
- Condo, Co-op, and HOA fees
- Debts for Loans from a Retirement Plan
- Debts That Could not be Discharged in a Previous Bankruptcy
Non-Dischargeable Debts
Some debt cannot be discharged in a bankruptcy; in other cases, you may have to meet certain qualifications to discharge it. Some examples of non-dischargeable debt include:
- Child Support
- Alimony Payments
- Fines, Penalties, and Restitution Owed Due to Criminal Charges
- Some Types of Tax Debt
- Debts Incurred as a Result of Injuring of Killing Another Person in a Drunk Driving Accident
While these debts can never be discharged, you may be able to petition a judge to grant you a legal exception to some other types of debt. As an example, student loan debt can sometimes be discharged if you convince a judge that you will be unable to pay it. These situations are usually specific and complex, so it’s best to speak with a bankruptcy attorney to find out if you may qualify.
There are also other cases where you will not be responsible for a debt unless a creditor can convince the courts that you should be. These usually involve debts owed to someone who defrauded you or committed other crimes. Again, our bankruptcy attorney in Bucks County, PA can examine your situation and find out if your debt is dischargeable or not. If you live in Philadelphia or anywhere else in Southeastern Pennsylvania, Nahrgang & Associates can help you with your debt situation. Get in touch with us by dialing (610) 489-3041 or by filling out the online form on our contact page to speak with a bankruptcy attorney about bankruptcy, debt relief, divorce law, foreclosures, and more.
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