Legally reviewed by Allen A. Kolber, Esq. - The Law Offices of Allen A. Kolber, Esq., P.C.
Key Takeaways
- A debt from an accident you caused by negligence is usually dischargeable; only deliberate injury survives.
- Fraud and deliberate injury debts survive only if a creditor sues within 60 days of the first set meeting date.
- Support, taxes, student loans, restitution, and drunk driving debts survive with no deadline and no objection needed.
- Completing a Chapter 13 plan discharges more than Chapter 7 does; a hardship discharge does not.
If your debts are building up and you are finding it more and more difficult to pay them off, then it may be in your best interest to file for bankruptcy. Even so, there are certain types of debts that are non-dischargeable, or in other words, cannot be eliminated with your bankruptcy filing. Read on to discover what debt does not go away with bankruptcy and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., can help you plan a way to pay them off.
What Type of Debt Goes Away Through Bankruptcy?
Whether you are filing for Chapter 7 or Chapter 13 bankruptcy, one of your main goals is likely to discharge your debt and receive a fresh start. Luckily, it is possible to relieve yourself of certain debts when declaring bankruptcy. Examples of such dischargeable debt include the following:
- Your debt from medical bills.
- Your debt from personal loans.
- Your debt from credit cards.
- Your debt from your leases or other contracts.
What Type of Debt Remains Through a Bankruptcy Filing?
You must understand that not all of your debt will be cleared when you file for Chapter 7 or Chapter 13 bankruptcy. Such debts are called non-dischargeable debts, and examples include the following:
- Most of your debt from taxes or liens.
- Most of your debt from your student loans.
- Your debt from your alimony payments.
- Your debt from your child support payments.
- Your attorney fees from your child custody or child support dispute.
- Your debt from your fines by certain government agencies.
- Your personal injury debts from your drunk driving accident.
- Your debts for injuries you inflicted deliberately, which is a narrower category than it sounds.
- The Supreme Court has held that a debt from an accident caused by negligence or recklessness can be discharged, because the law requires that you intended the injury itself, not merely the act that led to it.
- Your criminal restitution from your convicted crimes.
- Your debts incurred by fraud.
- Otherwise, any debt that was excluded from your bankruptcy petition.
Which Debts are Automatic, and Which Depend on Your Creditor?
The aforementioned list contains two different types of debt, and the difference impacts real cases. Some debts will survive discharge on their own with no action required from any party. Others will only survive if the creditor sues you inside of your bankruptcy case and wins.
The Ones Your Creditor Has to Fight For
Ultimately, certain debts will fall into the second category, meaning the creditor must sue. This includes debts based on:
- Fraud
- Money or property obtained through false pretenses
- Breach of fiduciary duty
- Embezzlement
- Deliberate injury
For these debts, the creditor must file an adversary proceeding, meaning a lawsuit within your bankruptcy case. The deadline is 60 days following the first set date for the 341 Meeting of Creditors. If that window lapses, the debt is eligible for discharge, regardless of how strong the creditor’s claim may have been.
The Ones That Will Survive Regardless
It’s important to understand that certain debts will not depend on the objection of a creditor, nor is there a filing deadline. This means a creditor can raise the question even if your case has long since closed. These debts include, but are not limited to:
- Domestic support obligations (child support and spousal support)
- Most taxed
- Student loans
- Criminal restitutions
- Debts owed as the result of a drunk driving injury
Does Chapter 13 Discharge More Than Chapter 7?
Yes, Chapter 13 may discharge more debts than Chapter 7, but the difference is easy to miss as the lists are often presented as identical. Successfully completing every payment under your Chapter 13 plan will wipe out certain debts that would survive a Chapter 7 case, including debts for the deliberate injury to another person or property.
If you cannot finish and the court grants you a hardship discharge instead, those debts will return to the non-dischargeable list, which is another reason plan completion is critical.
How Can I Pay Off Non-Dischargeable Debts?
Say you chose to file for Chapter 13 bankruptcy. This type of bankruptcy will grant you protection from the bankruptcy court and thus allow you to keep your assets. With this, the bankruptcy court will require you to submit a plan of repayment for the next three to five years. This plan of repayment should state how you intend to catch up on your debts, such as your mortgage payments and your car payments, while creditors are stopped from their collection activities.
Contact an Experienced New York Bankruptcy Attorney Today
If you are considering filing for bankruptcy, it is in your best interest to connect with an experienced attorney with the Law Offices of Allen A. Kolber, Esq. Our firm understands how complicated this process can be to navigate, which is why we will do everything in our power to help you fight for the best possible outcome. When you need assistance, do not hesitate to contact our firm today.
