Bankruptcy might be the best option for Texas consumers who are overwhelmed by their financial obligations. For many, Chapter 7 bankruptcy is best. However, it’s important to know which debts cannot be discharged.
What is nondischargeable debt?
Many debts can be discharged after filing Chapter 7 bankruptcy. However, some are nondischargeable. This means that you still owe those debts after your bankruptcy has been discharged. Those that are secured debts cannot be eliminated through a bankruptcy filing.
After you file for bankruptcy, a trustee is appointed to your case to review your debt and see what can or cannot be discharged. Dischargeable debt is added to the case, but you will still be responsible for debts that cannot be discharged.
What types of debt are considered nondischargeable?
There are certain types of debt that are nondischargeable. Any type of support that you were ordered to pay by a court cannot be discharged in a Chapter 7 bankruptcy. For example, if you went through a divorce and were ordered to pay alimony or child support, you would still owe these payments and cannot eliminate them through bankruptcy.
If you were sued in a lawsuit and there was a judgment against you ordering you to pay damages, you cannot discharge that debt.
Student loans are another type of nondischargeable debt. However, they differ in that they can be discharged if you are able to prove undue hardship if you were forced to pay them back.
If you owe federal income taxes, you are usually not able to discharge them through Chapter 7 bankruptcy. However, if you owe taxes that are older than three years, you might be able to discharge them depending on certain factors like when you filed your tax returns and were allowed extensions.