Florida Bankruptcy Law: Non-Dischargeable Debts
The primary objective for filing for bankruptcy is to offer yourself a clean slate by getting your debts wiped out. You can file either for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Regardless of the type of bankruptcy, you opt to file for, many of your debts will be wiped out at the end of your case. However, not all debts are discharged in bankruptcy. It is recommended to work with an experienced Orlando bankruptcy attorney to determine if you should file for bankruptcy in the first place.
Debts that are wiped out in bankruptcy
Whether you opt to file for Chapter 7 or Chapter 13 bankruptcy, the following debts are discharged.
- Medical bills
- Personal loans
- Credit card debts
- Lawsuit judgment against you
- Promissory notes
- Many debts associated with car crashes
- Various obligations under lease and contracts
- All other debts that don’t fall under the categories discussed below.
The following debts are wiped out in a Chapter 13 bankruptcy, not in Chapter 7 bankruptcy.
- Court fees
- Debts associated with loans from a retirement plan
- Marital debts arising out of settlement agreement or a divorce (but not debts support)
- Debt that could not be wiped out in your previous bankruptcy
- Coop, condo, and HOA fees
- Debt that you incurred while paying for a non-dischargeable tax debt
Unless you have an in-depth understanding of the bankruptcy law, it isn’t easy to know what debts can be wiped out and those can’t be discharged. This is the reason you should consider consulting with a reliable attorney and analyze the nature of your debts long before you file for bankruptcy. Remember, filing for bankruptcy is costly and will leave a black mark on your credit score. Thus, you should be sure that the benefits associated with the entire process outweigh these costs.
Debts that cannot be wiped out in bankruptcy
The debts that can never be discharged include;
- Alimony and child support
- Certain taxes
- Penalties, fines, and restitution that you owe for breaking the law
- Liabilities arising out a person’s death or injury caused by your intoxicated driving
If you choose to file for Chapter 7 bankruptcy, your debts from a retirement plan, debts that were not discharged from your previous bankruptcy case, and coop, condo, and HOA fees will not be discharged.
The following debts will not be discharged unless you successfully prove that an exception applies.
- Regular income tax debt
- Student loan
Unless your creditor successfully objects, the following debts will not be discharged.
- Debts arising from your intentional and malicious acts
- Debts arising from fraud and recent debts for luxuries exceeding $675, cash advances of more than $950 within a specific period before you filed for bankruptcy.
- Debts arising from breach of fiduciary duty, embezzlement, and larceny.
- Creditors or debts not listed in your bankruptcy papers
According to bankruptcy experts, there are three categories of debts that will not be discharged in your bankruptcy. Some of these debts can’t be wiped out unless you can successfully convince the court that they should be. Other debts will not be discharged unless your creditor successfully argues that the debt should be wiped out.