Expert Guidance on Nondischargeable Debts in Bankruptcy
Bankruptcy offers a vital path to a financial fresh start, but it’s essential to understand that not every debt is eliminated. Certain obligations, known as nondischargeable debts (or undischargeable debts), remain your responsibility even after your bankruptcy case is complete. At Rulon T. Burton & Associates, we specialize in guiding clients through the complexities of bankruptcy law, ensuring you fully understand which obligations fall into this category and how they impact your future.
Expert Legal Guidance for Nondischargeable Debts
Understanding the nuances of these nondischargeable obligations can be challenging. Our experienced bankruptcy attorneys at Rulon T. Burton & Associates provide personalized advice, helping you identify potential obligations that survive bankruptcy, understand your options, protect your rights, and secure the best possible financial outcome.
Don’t let the threat of remaining obligations hold you back. Rulon T. Burton is here to help you regain control.
Ready to take the first step toward financial freedom? Schedule a free consultation with our team today. We’ll assess your situation, answer your questions about nondischargeable debts, and develop a customized strategy.
Call us now or fill out our online contact form to schedule your free consultation.
Common Types of Debts That Survive Bankruptcy
While bankruptcy is powerful, the law designates specific categories of obligations as those that survive the process to uphold public policy and protect certain creditors. Knowing these exceptions is crucial for a successful bankruptcy filing.
Child Support and Alimony (Domestic Support Obligations)
Obligations that arise from divorce or separation agreements, such as child support and alimony (also called domestic support obligations), are considered top priority. These obligations are nondischargeable debts to protect the financial stability of former spouses and children who rely on these payments. You are legally obligated to continue making these payments after bankruptcy, and failure to do so can cause serious consequences like wage garnishment or contempt of court charges.
Recent Tax Debts and Fraudulent Taxes
Tax debts incurred within a specific timeframe (generally the past three years for income taxes) are typically not discharged. Furthermore, any tax debt that arose from fraudulent activities or intentional tax evasion will always survive the bankruptcy process, regardless of when it was incurred. This rule prevents individuals from misusing bankruptcy to evade their tax obligations.
Student Loans (Undue Hardship Exception)
Student loan debt is notoriously difficult to discharge. By default, it is a debt that survives bankruptcy. The only exception is if you can prove that repaying the loans would impose an “undue hardship” on you and your dependents. This is a very high legal bar to meet, requiring you to prove an inability to maintain a minimal standard of living, that your financial situation isn’t likely to improve, and that you’ve made good-faith efforts to repay.
Government Fines, Penalties, and Restitution
Fines and penalties imposed by the government—such as traffic tickets, criminal fines, or restitution orders—are generally not discharged. This exception ensures individuals are held accountable for legal violations and upholds the integrity of the legal system.
DUI-Related Debts
Debts resulting from personal injury or property damage caused while driving under the influence (DUI or DWI) are typically nondischargeable debts. This includes medical expenses, property repair costs, and any related legal judgments. This reflects a strong societal stance against impaired driving.
Secured Debts
A secured debt (backed by collateral like a car loan or mortgage) is not automatically discharged in the traditional sense, but the creditor’s lien remains on the property. You must choose to either:
- Reaffirm the debt: Agree to continue making payments and keep the collateral.
- Surrender the collateral: Give up the property, and the underlying debt will typically be discharged.
Undisclosed or Fraudulent Debts
It is paramount to provide accurate and complete information about all your obligations when filing. A debt you intentionally fail to list on your schedules will not be discharged and remains a nondischargeable debt. Furthermore, debts obtained through fraud, false pretenses, or misrepresentation will also be deemed a surviving obligation. Deliberately omitting debts can lead to accusations of bankruptcy fraud.
Get in touch today by calling 801.305.3702.
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Murray, UT 84107
Tel: (801) 305-3702
Text: (801) 288-0202
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Email: justin@rulontburton.com