Although many debts are wiped clean in bankruptcy, not all debts are eligible. Congress has determined that certain types of debts can't be discharged through the bankruptcy process.
There are 19 categories of debt excepted from discharge under Chapter 7 and a more limited list of exceptions under Chapter 13.
Some of the most common types of debt ineligible for discharge are alimony and child support, certain taxes, debts arising from personal injury claims that were drug and alcohol-related, and criminal fines.
Student loans are almost entirely ineligible for discharge. However, you may be able to discharge your student loan if certain traumatic life events like permanent disability make repayment impossible.
Certain gambling debts, such as those incurred in illegal gambling or when the debtor knew he or she would be unable to pay the debt, are also ineligible for a bankruptcy discharge.
Lastly, sometimes previous bankruptcies can also affect whether your debts can be discharged at a particular time.
Remember, debts such as credit card balances, medical bills, personal loans, legal gambling debts, mortgages and car payments are all eligible to be discharged. Freeing up your income by discharging those debts can sometimes make it much easier to pay the rest.
One of the best ways to get rid of these debts is to file for Chapter 7 bankruptcy protection. Depending on your particular situation, filing Chapter 13 might also be a good option.
Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.