Nondischargeable Debt in Chapter 7 Bankruptcy

Hurdles to Chapter 7 Bankruptcy Discharge.

Most Individuals who file Chapter 7 bankruptcy are able to get rid of most unsecured debt, such as credit card balances, medical bills, and personal loans, some debts are non-dischargeable. Some debts aren’t wiped away in Chapter 7 bankruptcy, 11 U.S.C. § 523-Exception to Discharge.

Most Chapter 7 filers wont run into any difficulty during the Chapter 7 Bankruptcy procedure. However, a Chapter 7 discharge is not guaranteed. The filer has to make sure that she clears all hurdles in order to get her debts discharged.

Some Debts Cannot Be Discharged

There are 19 categories of nondischargeable debt which are numerated in. 11 U.S.C. § 523  Simply put you cannot discharge these debts because the Congress has deemed it to be against public policy to discharge these debts. The creditors can pursue collection even after you get your discharge at the conclusion of your case.

In some of the 19 categories of debt, you may still get your debt discharged if the creditor doesn’t object, or if the creditor objects yet the court disagrees with the creditor, then your debt will be discharged.

Nondischargeable Debts in Chapter 7 Bankruptcy

The following debts are nondischargeable:

  • Debts that the filer does not list on the Chapter 7 Bankruptcy petition or does not inform the creditor of the Chapter 7 Bankruptcy. Unless the creditor had actual notice or knowledge of the bankruptcy filing; 
  • Student Loan(s);
  • Certain Taxes;
  • Spousal, Child support or alimony;
  • Government agencies fines and penalties;
  • Personal injury caused by the filer’s driving while intoxicated;
  • Certain tax-advantaged retirement plans;
  • Condominium or cooperative housing fees;
  • Attorney fees in child custody and support cases; and
  • Court fines and penalties, including criminal restitution.

Nondischargeable Debts, Creditor Objects

Not all debts are automatically  dischargeable. Creditors must ask the court to determine if they are dischargeable. If the creditor doesn’t raise the  issue or the creditor raises the issue but the court doesn’t agree, these debts will be discharged.

Credit Card Purchases for Luxury Goods.

If debtor owes more than $725 to a single creditor and purchase was made within 90 days of filing a Chapter 7 bankruptcy, then the debts are presumed fraudulent and non-dischargeable. The creditor must bring a type of lawsuit called an adversary proceeding. The debt will be discharged if the filer can proves that she intended to pay the charges back or that the goods aren’t “luxury” items. 

Cash Advance from Credit Card(s)

If the filer takes a cash advance from a credit card within 70 of filing, the debt is assumed to be fraudulent and nondischargeable. If the filer can show and prove that she intended to pay the money back, then that debt can also be discharged. 

Debts That Are The Result of Fraud or Misrepresentation

All debt that were obtained by misrepresenting income on credit applications or if the filer never intended to actually pay back  for a purchase of goods and services will not be discharged. 

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Contact Our Office for a Free Bankruptcy Consultation

The bankruptcy laws in California, including the exemptions listed under Sections 703 and 704, are updated every couple of years. At Alamdari Law, we will keep you abreast of the current laws and how they may affect your proceedings. We know that the decision to file bankruptcy can be overwhelming, but we are here to help.

If you are ready to get a fresh start and move toward financial freedom, contact our office at (661) 347-6762. Our firm is committed to providing the highest level of customer care to every person that walks through our door. We offer flexible payment plans and will work with you to develop the right strategy for your case. Call or email for a free initial consultation.

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