The purpose of bankruptcy is to help a person obtain relief from debts that they are unable to pay. However, there are certain debts which cannot be discharged and the person must continue to pay the debt even if they file bankruptcy.
Non-dischargeable debts can include debts related to a person’s responsibility to their family or government, debts incurred illegally, and certain debts incurred immediately before filing bankruptcy. If you file for Chapter 7 bankruptcy, you may still have to pay these debts even after you file bankruptcy. In a Chapter 13 bankruptcy, these debts must be paid in full under your repayment plan or you will have to continue paying on them after the end of your plan.
Debts that are generally non-dischargeable include:
- Child support or alimony debts
- Taxes or fines owed to the government (older taxes may be dischargeable)
- Most student loans
- Debts involving fraud, embezzlement, larceny
- Debts incurred by driving under the influence causing personal injury
- Debts incurred for luxury goods or cash taken immediately before bankruptcy from a credit card
This is not a comprehensive list. There are other debts that may not be discharged if the creditor objects to the discharge and the judge rules that a debt is fraudulent or non-dischargeable.
Though these debts will not be discharged when you file bankruptcy, they can be consolidated or the terms altered to be easier to pay off. There are also exceptions that can allow these debts to be discharged in certain circumstances. If you have an unusual debt or would like more information on what debts can and can’t be discharged, please contact a Utah bankruptcy attorney today to learn more about your options.