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Is There A Chance That I Will Not Be Able To Get Certain Debts Discharged In A Bankruptcy?

Yes, this is a possibility. There are certain debts that are described as ‘non-dischargeable,’ and therefore cannot be eliminated in the traditional way in which other debts are knocked out. But whether or not these debts are dischargeable depends on very specific rules.

The list of typical debts that are non-dischargeable are as follows: tax debt, back child support, student loans, debts that were assigned to you by way of a divorce decree, and debts that were incurred fraudulently. Let’s look at each in turn: Tax debt is typically a non-dischargeable debt because it is a debt owed to the government (and therefore theoretically owed to society at-large). This would include income tax, personal property tax, real estate tax, and sales tax. However, there is a ‘loop hole’ to this general rule: if the income tax debt is more than three years old, was filed timely, and the original return was not filed fraudulently, then there is a possibility of discharging this particular income tax debt.

Back child support can never be discharged in a bankruptcy. Student loans are very rarely dischargeable, again because it is a debt owed (normally) to the government, and unless you are terminally ill there is a very small chance that you can get this type of debt discharged. Debts that you pick up by way of a divorce (like a joint credit card that the judge orders you to pay) cannot be discharged in a St. Louis Chapter 7 bankruptcy, but can be discharged in a St. Louis Chapter 13 bankruptcy (because of the so-called ‘super discharge’ feature of that type of Missouri bankruptcy). But debts that were created by way of fraud can never be discharged in a bankruptcy. Typical examples of this would include using a false social security number, misrepresenting your financial standing, or using the identity of someone else (either through banking information, credit numbers, or personal data).

Another example of a debt that may become non-dischargeable is one that was recently incurred just before filing for bankruptcy. If for instance you purchase a large item(s) in a single credit card transaction (let’s assume for this example that the single transaction is $2,000), and then immediately file for bankruptcy thereafter, it is very likely that the creditor will challenge the dischargeability of the debt as being in ‘bad faith.’ In other words, the creditor will argue that you purposefully charged a large amount onto your credit card knowing full well that you were about to file for bankruptcy, in the hopes that you could extinguish this debt along with all the rest. The court will almost assuredly agree with this argument (assuming that the facts, times, dates, and amounts are correct), and hold that that particular debt cannot be discharged. In order to prevent this from happening, it is often necessary to show ‘a good faith effort’ on your part (so as to beat back the ‘bad faith’ argument from the creditor). So long as several monthly, regular payments have been made on the debt in a timely fashion (like your regular monthly minimums to the card companies), then including this debt in your bankruptcy should not be a problem.

The affordable St. Louis bankruptcy attorneys at Brinkman & Alter, LLC have been making sure that our clients get the best outcome for their particular situation for years. Our goals is ensure that each individual gets rid of the debts they do not want, keeps all the assets they want to hold onto, and do it all at an affordable price. All phone conversations and office consultations are free of charge.