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Which debts can't be discharged in Chapter 7 bankruptcy

Millions of Americans find themselves saddled with debt, oftentimes due to no fault of their own. Trying to find a way to get ahead of this debt can be an overwhelming task. Realistically, many are unable to do so even though they try for years, sometimes even decades to get caught up on past due payments. By waiting to fully address their financial hardship, individuals put themselves at risk of facing long-term financial difficulties and a significant financial toll that is often associated with the stressors of debt.

Although it is viewed negatively by some, bankruptcy is a very real debt relief option. Depending on which type of bankruptcy is pursued, an individual may be able to retain his or her most prized assets while eliminating debt. In other words, when successfully completed, bankruptcy can provide a once indebted individual with the fresh financial start he or she needs.

There are some limitations to bankruptcy, though. In a Chapter 7 bankruptcy, for example, only those debts that are listed in the schedules included with the initial filing can be dissolved. Additionally, many debts, taxes, child support, alimony, lawsuit damages owed from a lawsuit pertaining to one's drunk driving and court fees cannot be forgiven. Student loans, which we will discuss more in-depth in another post, can only be written off if it can be shown that those debts cause undue hardship.

Even though there are some limitations as to the kinds of debt that can be discharged through a Chapter 7 bankruptcy, it is still worth considering this option if you are facing financial challenges. Many of our clients discover that by being thorough in their bankruptcy petition and abiding by any court orders, they are able to reclaim a part of their life that they once thought was gone forever: their financial freedom.

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