“It’s a common misconception that all debts can be erased with chapter 7 bankruptcy, but this isn’t the case,” says Bert Briones, an Irvine bankruptcy attorney . “Some debts are “non-dischargeable debts,” and cannot be eliminated by filing for chapter 7, regardless of the circumstance.”
These debts include criminal fines (like court fees or penalties), and back taxes. You may also not attempt to discharge any debts incurred as a result of criminal activity. For example, if you were charged with negligent homicide, you cannot attempt to use chapter 7 bankruptcy to discharge any debts related to the victim’s death, even if they are not court fees or fines.
Debts incurred due to fraud or false information will not be considered dischargeable. Fraudulent debts are those that you rang up knowingly before filing for bankruptcy. For example, if you obtained a new credit card, charged it to the limit purchasing items subject to bankruptcy exemption, and then filed for bankruptcy less than ninety days later, that debt will not be discharged. Similarly, if you lied on a credit card application in order to obtain the card, any debt incurred on it won’t be eligible for chapter 7.
Any debts that weren’t listed on your original bankruptcy filing also will not be discharged. When you file for bankruptcy, it is your responsibility to list all of your dischargeable debt. Any that you neglect to mention will not be considered at that time.
Alimony or child support is also not dischargeable, however divorce settlements may be if it is mutually agreed upon by your former spouse.
Lastly, you also cannot use chapter 7 to discharge debts that you racked up paying for non-dischargeable debts. If you took out a loan or cash advance in order to pay for a fine relating to a criminal charge, for example, you are not eligible to claim that loan in your bankruptcy filing.
If your debts fall under these criteria, don’t worry. Even if chapter 7 isn’t an option for you, you might still be eligible to file for chapter 13 bankruptcy, instead, since it operates a little bit differently. Contact a good bankruptcy attorney in order to go over your complete list of debts, so you can determine whether or not you are a candidate for chapter 7 or chapter 13 bankruptcy.
If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.
We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.
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