Dealing With Nondischargeable Debts in Bankruptcy
Not all of your unsecured debts can be eliminated in bankruptcy. While exceptions to discharge cover debts ranging from child support to back taxes, the rules differ depending on such factors as the nature of the debt, the age of the debt, or your ability to present a hardship case.
For dependable advice about your options concerning nondischargeable debts in Chapter 7 or Chapter 13, contact an experienced lawyer at one of the offices of Steven E. Mirsky, LLC. With locations in Rockville, Frederick and Laurel, we serve clients throughout northern and western Maryland.
Call 866-654-2003 for advice about back taxes and student loans
Nondischargeable debts come in many forms. Some are by definition nondischargeable, while others are subject to discharge unless the creditor files a specific objection. Examples of nondischargeable debts include the following:
- Lawsuit damages related to drunk driving, willful or malicious conduct, or fraud
- Child support or alimony
- Taxes that are less than three years old or for which no return has been filed
- Most student loan obligations
- Certain credit card debts incurred under circumstances indicating an intent to defraud the issuer
Many old tax debts can be discharged in bankruptcy
A lot of people will tell you that tax obligations are nondischargeable debts. This is only true of taxes that have been assessed and payable for less than three years. If you owe taxes for which you’ve filed the returns more than three years ago, or that have been in collection for at least that long, you can discharge them in bankruptcy like other unsecured claims, unless enforceable tax liens are in place against property with enough value to meet them.
It’s hard nowadays to get rid of student loan obligations in bankruptcy
Although student loans have always been excepted from discharge, it used to be that a hardship argument could convince a bankruptcy court to excuse you from repayment of these debts. Today, recent amendments to the Bankruptcy Code have made it more difficult to prove hardship as a basis of discharge. In order to prove hardship, it is now necessary to demonstrate that your education has little or no value in helping you generate income for reasons beyond your control.
Whether or not your tax or student loan obligations can be discharged, you will have opportunities in Chapter 13 to reduce interest and penalty charges that will make it easier to catch up on those debts during the 3-to-5 year plan period.
To learn more about your options for dealing with apparently nondischargeable debts, contact a knowledgeable bankruptcy attorney at the law offices of Steven E. Mirsky, LLC, in Rockville, Frederick or Laurel.
