What Types of Debt Aren’t Dischargeable in Bankruptcy?

Posted on : June 2, 2019

A Chapter 7 bankruptcy allows you to discharge some debts by liquidating your non-exempt assets, using the funds to pay down as much debt as you can, and the rest is erased. This can be a helpful first step in regaining your financial freedom, however, not all debts are dischargeable. It’s important to understand what is and what isn’t before you consider filing for bankruptcy.

Secured & Unsecured Debt

There are two different types of debt: secured and unsecured. Unsecured debt is often considered dischargeable under a Chapter 7 bankrutpcy, for example, medical debts and credit card debt. Secured debts are much harder and sometimes impossible to have discharged, such as tax debt and student loans.

Types of Non-Dischargeable Debt

There are many different types of debt that typically aren’t discharged in a bankruptcy:

Alimony & Child Support

Alimony and child support are both considered “non-dischargeable” debts. Typically, back child support or alimony owed won’t be discharged, but the court may consider a structured repayment plan. Ongoing payments should be made as usual, unless you file for a modification of your support order through a Florida family court.  

State & Federal Taxes

Only in very rare cases can state or federal taxes be discharged. This is usually in the case of very old tax debt. Even in times of financial hardship, payment plans are typically arranged.

Recently Incurred Debt

Any debt that has been incurred within 180 days of your bankruptcy filing is typically not going to be eligible for discharge. This helps prevent the misuse of the bankruptcy system to incur debt before bankruptcy with the sole purpose of having it discharged before it has to be paid.

Student Loans

Student loans are one of the most common types of debt that cannot be discharged in a bankruptcy. You can, however, potentially reach an agreement with the bankruptcy court for a reasonable payment plan calculated based on your disposable income. This can make it easier to pay down your student loans while still affording the cost of day to day living.

Contact the Caplan Bankruptcy and Law Firm Today

Are you overwhelmed with more debt than you can possibly pay? Talk to someone at our bankruptcy law firm that can help. We know how challenging it can be to face mountains of debt, and we’ll help you find a solution. Call today for a consultation to discuss the specifics of your case at (407) 634-2116.