The vast majority of debts are “discharged”—legally written off—if you file a “straight bankruptcy” Chapter 7 case. Bankruptcy law actually says that ALL debts are discharged EXCEPT for a limited list of specific kinds of debts that are not. So, the discharge of debts granted under Section 727 of the Bankruptcy Code applies to ALL debts except those listed as exceptions to discharge in Section 523 .
It’s helpful to think about these exceptions to discharge in two categories: 1) debts which ARE discharged if the creditor does not object and succeed in that objection, and 2) debts which are NOT discharged even without any objection raised by the creditor.
Creditor Must Raise Objection to Stop Discharge
Creditors can challenge your ability to discharge three types of debt, and must do so—and succeed in that challenge—or else that debt will be discharged:
- Debts that you incurred when making a misrepresentation or committing fraud in order to get the loan or credit. This misrepresentation or fraud can be an intentional falsehood on a loan application, cash advances or use of your credit card when you had no intention of paying back that credit, or any other way of deceitfully incurring a debt.
- Debts resulting from your theft or embezzlement, and from fraud against a person to whom you owed loyalty in a trust relationship. These include stealing from your employer, cheating a business partner, and using duress to pressure an elderly relative to change his or her will in your favor.
- Obligations resulting from intentionally and maliciously harming a person or business, or his or its property. This includes bodily injuries and property damage caused intentionally, such as during a domestic disturbance or bar fight, and sometimes those caused recklessly.
The person or business to whom you owe any of these types of debts must file a formal “adversary proceeding”—a type of limited lawsuit—in the bankruptcy court, usually within 60 days of your meeting of creditors. Otherwise that debt is discharged forever along with the rest of your debts.
Debt Not Discharged Even Without Objection
The creditors do not need to object (and they virtually never do) for the following types of debts, which are not discharged:
- Criminal fines, fees, and restitution
- Taxes of many kinds, as long as they meet certain conditions
- Child support, spousal support and maintenance
- Almost all, but not absolutely all, student loans
- Claims for bodily injury or death from driving a vehicle, boat, or aircraft while intoxicated
- Debts not listed in your bankruptcy schedules
If you are concerned about creditors objecting to the discharge of any of your debts, or about whether any of your debts fall within any of the exceptions to discharge, I would be happy to review your debts with you and advise you about whether you have anything to worry about. At the office of bankruptcy attorney Carrie Weir, in Rockwall, Texas, I provide a free initial consultation to anyone with questions or concerns about filing bankruptcy. Please reach me at my office by using the contact form here or by calling me at 972-772-3083 to arrange a private meeting. I represent clients in Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, Rowlett, and the surrounding areas.
Speak Your Mind