Debts That Stay With You After Chapter 7

Due to the rampant financial difficulties that have occurred in recent years, filing for bankruptcy protection has become increasingly commonplace. It is has truly become a refuge for many of those who find their debt burden overwhelming and are in danger of losing everything they have worked years to obtain. Filing for Chapter 7 bankruptcy in particular has significantly increased. Known alternatively as liquidation bankruptcy, success in filing provides the beleaguered debtor with a chance to start fresh with the elimination of many, if not the majority, of their debts. It should be noted that failure to properly follow the rules of bankruptcy procedure can lead to a denial of discharge.

But while Chapter 7 bankruptcy may be the best option for many, it is not a panacea for all ills. For one thing, there are some debts that are generally nondischargeable. This means that there are debts you have that will not be wiped out even if you successfully file for Chapter 7 bankruptcy. You will still need to pay for these debts, although a few of them can be discharged at the court’s discretion, and your creditors can still sue for payment.

If you are considering Chapter 7 bankruptcy and the bulk of your outstanding obligations are considered nondischargeable, you may need to pursue an alternate method of debt relief. Below are some debts that will always be nondischargeable under the Bankruptcy Code:

  • Student loans
  • Personal injury claims due to DUI
  • Tax-sheltered retirement plan payments
  • Fines and penalties imposed by government agencies
  • Alimony and child support
  • Legal fees for child custody and support disputes
  • Criminal restitution and court fines
  • Debts not included in the petition for bankruptcy

There are also otherwise dischargeable debts that may be denied discharge by the court under certain circumstances. These include purchases of luxury items in excess of $600 on a single credit card bought within 90 days of the bankruptcy filing and cash advances in excess of $875 incurred within 70 days of filing for bankruptcy.

It is important to know which debts will not be wiped out if Chapter 7 bankruptcy is being considered. Even if there is no other option, forewarned is forearmed.

One Responseto “Debts That Stay With You After Chapter 7”

  1. Bankruptcy is such a complicated process. It’s important that you have good representation.

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