An Atlanta Area Attorney Discusses Debt Discharges In Bankruptcy
Many of my clients come to my office in Atlanta or Jonesboro seeking relief under Chapter 7 or Chapter 13 bankruptcy only to learn that their biggest debt obligations are not going to be discharged. While bankruptcy allows most types of debts to either be discharged in the case of Chapter 7, or paid off on a modified schedule under Chapter 13, there are some non-dischargeable exceptions that can interfere with an individual’s ability to financially recover.
Non-Dischargeable Debt In Bankruptcy
There are multiple categories of debt that are not dischargeable under Chapter 7 and Chapter 13. The following are some of the more common non-dischargeable debt classes:
- Tax Claims – Taxes may or may not be dischargeable. In order for a tax claim to be dischargeable under Chapter 7 or Chapter 13 bankruptcy it must meet all five of these criteria.
- The due date for filing the return was thirty-six months ago or greater.
- The tax return was actually filed at least twenty-four months before the date of filing for bankruptcy.
- The tax assessment is at least 240 days (approximately eight months) old
- The return was not fraudulent.
- The tax payer is not guilty of evasion.
If you are unsure as to whether your tax liability is dischargeable, contact a qualified Georgia bankruptcy attorney.
- Child Support and Spousal Support (Alimony) – Bankruptcy does not free you from the debt obligations that you have incurred through a divorce decree or judicial order to pay support. Even after you declare Chapter 7 or Chapter 13 bankruptcy, you will still owe child support and or alimony. However, modifications to alimony are often available when there has been a significant change in either of the former spouses’ income.
- Student Loans – As the costs of education rises, student loans have become a significant cause for bankruptcy in Georgia. However, the government backed student loan debt itself is not generally dischargeable.
Some of the other types of non-dischargeable debts listed on the U.S. Federal Court website include:
- Debts not set forth by the debtor on the lists and schedules the debtor must file with the court,
- Debts for willful and malicious injuries to person or property,
- Debts to governmental units for fines and penalties
- Debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated,
- Debts owed to certain tax-advantaged retirement plans
- Debts for certain condominium or cooperative housing fees.
Speak to a GA Bankruptcy Attorney
Even if you’ve heard that the most significant portion of your debt is non-dischargeable Chapter 7 or Chapter 13 bankruptcy, they may still be a viable option for you. Oftentimes, the relief that you experience with regard to your dischargeable debt will allow you to manage your non-dischargeable obligations. If you find yourself unable to manage your debt, speak to a qualified Georgia bankruptcy lawyer at your earliest convenience.