What Debts Cannot Be Discharged in Bankruptcy?
While bankruptcy can afford you a fresh financial start, it is unlikely to wipe away all your debt. Many residents of Columbia, the State of South Carolina, and the nation at large have been negatively affected by growing personal financial strain and tanking consumer confidence. As a result, bankruptcies are on the rise. Having a better understanding of what a bankruptcy can discharge (and what it cannot) is a good place to start if you’re considering moving in this direction. One of the most important early steps you can take on your journey forward is consulting with our experienced Columbia bankruptcy attorneys at Reed Law Firm, P.A.
Chapter 7 vs Chapter 13 Bankruptcy
The primary forms of personal bankruptcy in South Carolina are Chapter 7 and Chapter 13. Chapter 7 is a liquidation process that discharges most unsecured debt in a relatively short period. Each filer, however, must pass a strict means test, and non-exempt property can potentially be sold to help cover their debt.
Chapter 13 bankruptcy, on the other hand, is a financial restructuring, which results in a payment plan of from three to five years. This means you can keep your property, such as your home and car, but you must keep up with the payment plan you agree to in the bankruptcy.
Debts that Can’t Be Discharged in Bankruptcy
There are certain debts that can’t be discharged in bankruptcy. If you file for Chapter 7 bankruptcy, you’ll remain responsible for repaying these debts. And if you file for Chapter 13 bankruptcy, you’ll need to cover these debts in full through your repayment plan. Prime examples of non-dischargeable debts include the following:
- Back child support, spousal support, and other debts that relate to court-ordered family support
- Student loans, unless repaying them leads to undue financial hardship
- Debts related to personal injury claims from intoxicated driving
- Fines and penalties that relate to legal violations
- Debts that weren’t listed in your bankruptcy filing
- Income tax debts that relate to your filings over the last three years, and many other tax-related debts
Chapter 7 Bankruptcy
There are certain debts that may not be dischargeable in a Chapter 7 bankruptcy. This generally occurs when a creditor challenges the request to discharge a debt, and the presiding judge declares the debt non-dischargeable as a result. Common examples include:
- Debts incurred on the basis of false pretenses, false representations, or outright fraud
- Cash advances that exceed $1,100 and that were taken out within 70 days of filing
- Credit purchases of luxury goods that exceed $800 and that were bought within 90 days of filing
- Debts owed due to a divorce decree
Turn to Our Experienced Columbia Bankruptcy Lawyers for the Help You Need
Our seasoned bankruptcy attorneys at Reed Law Firm have earned an impressive reputation for faithfully serving clients throughout Columbia and the State of South Carolina, and we’re here for you, too. For more information about everything we can do to help, please don’t delay contacting us online or giving our firm a call at 803-726-4888 today.
