Declaring bankruptcy can help you stabilize your financial situation and get out from underneath various forms of debt. However, it does not wipe away every financial obligation you may have. You cannot eliminate—or “discharge”—certain types of debt through the bankruptcy process, regardless of which chapter you file.
If you are unsure which of your financial obligations bankruptcy will wipe out, talk to a lawyer about the difference between dischargeable and non-dischargeable debts in a Jacksonville bankruptcy. A knowledgeable bankruptcy attorney could go over what financial obligations you may be able to get rid of in your specific situation.
What Types of Debts Are Always Considered Non-Dischargeable?
In Jacksonville, several types of financial obligations cannot be discharged regardless of any other circumstances. Some of the most common types of non-dischargeable debts are obligations that stem from a court order, such as alimony and child support.
Other financial obligations that the Bankruptcy Code will not forgive generally include:
- Court fines from a criminal conviction or traffic violation
- Debts related to civil liability in a drunk driving case
- Most state and federal tax debts
- Most student loans
There are certain circumstances in which you could have your student loans discharged, though you must prove that repaying the debt would cause undue hardship. If your lender disbursed your student loan to YOU rather than directly to your school, that might NOT even be a student loan.
When filing for bankruptcy, it is crucial to list all your financial obligations, as any debts that you forget or intentionally neglect to include in the filing can be considered non-dischargeable. However, if the creditor in question finds out about the bankruptcy declaration and tries to collect, those unlisted debts could be forgiven. You should reach out to an experienced lawyer before declaring bankruptcy to ensure your debts are dischargeable.
Financial Obligations That May Not Be Forgiven in Jacksonville
The Bankruptcy Court will not necessarily discharge a particular debt just because federal law does not explicitly declare it to be non-dischargeable. If a creditor files a lawsuit within your bankruptcy (known as an adversary proceeding), your judge may declare an otherwise dischargeable debt to be non-dischargeable if the debt:
- Is caused by intentional damage done to another person or their property
- Stems from fraud, embezzlement, or other criminal actions
- Is credit card debt incurred to pay off a non-dischargeable debt
- Is for the purchase of luxury goods—items not essential to maintain a basic standard of living—within 90 days of a bankruptcy filing
Courts have a lot of leeway in determining what kinds of debts involve “false pretenses, a false representation, or actual fraud.” Hence, it is critical to talk to an attorney to determine which of your financial obligations are dischargeable.
Call an Attorney to Discuss Dischargeable and Non-Dischargeable Debts in a Jacksonville Bankruptcy
A qualified attorney is in the best position to determine which of your debts a bankruptcy can and cannot wipe out. Otherwise, it can be hard figuring out exactly which debts are considered dischargeable.
Our Jacksonville consumer bankruptcy lawyers will answer any questions you have about dischargeable and non-dischargeable debts. Call today to start discussing your financial situation.