4 Types of Debts that are NOT Discharged in Chapter 7 Bankruptcy

When going through bankruptcy you might expect to emerge on the other side without any debts. The fact is, however, that there are some types of debts that a Chapter 7 bankruptcy will not discharge. This means that you will still be responsible for repaying these debts, so understanding each of them before moving forward with the bankruptcy process is very important.

Child or Spousal Support

If you have been ordered by the court to pay child support or spousal support (often called alimony) and you fail to do so, the debts can build up quite quickly. This debt will not be discharged when going through Chapter 7 Bankruptcy, so it is important to be aware of this. The only way to get out from under this type of debt is to pay it off, so the sooner you begin, the better. This type of debt also doesn’t expire, which can have a significant impact on your financial future.

Student Loans

Federal student loans, and most other types of student loans, are nondischargeable. This rule was made because it allows lenders to approve a far greater number of people to get the money they need to seek a higher education. If the loans were able to be discharged by going through bankruptcy, many people would enter Chapter 7 right after graduating. Since their education can’t be taken away from them, they would have very little to lose.

Court Fines and Penalties

Court fines and penalties issued against someone must be paid and will not be discharged after going through Chapter 7 bankruptcy. This includes orders of restitution, court fees, late payment penalties, and just about any other payment that is owed to the courts.

Most Tax Related Debts

If you have failed to pay your taxes for a few years, chances are that you owe quite a bit. While there are some options to try to settle for less than the full amount owed, bankruptcy is not one of those options. Tax debt, in virtually all cases, is not able to be discharged by the bankruptcy courts.

Getting Help with Chapter 7 Bankruptcy

If you are having financial troubles and are considering bankruptcy, make sure you reach out to us. We’ve helped many people with this issue, and we’ll work hard on your behalf as well. Contact us to discuss what options are available based on the type and amount of debt you currently have.