The general rule is that all your pre-petition debts are discharged at the end of a bankruptcy case. There are about 30 exceptions, however. The most common ones in consumer cases are:
- Debts for recent income taxes, or for which you didn't file a return when due, or for which you filed a fraudulent return. The complete rules for discharging taxes are labyrinthine and full of cross-references to other sections of the Code. But, in general, if the tax year is for a return due more than three years before bankruptcy, and you filed your return on time, the tax will be treated as a general unsecured claim, and will be discharged in a case under Chapter 7 or Chapter 13 (watch out for filing extensions though, or even leap years). Income taxes arising from returns due within three years are priority claims that won't be discharged in any chapter, and have to be paid in full in a Chapter 13 case. Income taxes that aren't assessed until after you file bankruptcy are not discharged and continue to accrue interest and penalties during the case; you can't pay more than the plan percentage on these taxes, so they really hurt you at the end of the case.
- Debts incurred by fraud (lyin, cheatin, and stealin). Normally the Bankruptcy Court assumes you are honest - just unfortunate. There is a presumption of dishonesty or fraud, however, if you (a) charged more than $650 in luxury goods or services to a single creditor within 90 days before filing, or (b) obtained cash advances aggregating more than $925 on a single credit card within 70 days before filing. You should stop using credit cards altogether as soon as you begin even thinking about filing bankruptcy. Cut them up!
- Debts for student loans, unless you have a permanent and total disability resulting from a medical condition, sometimes called undue hardship. It is usually very difficult to convince a bankruptcy judge that an undue hardship exists in a case. For some reason, almost all bankruptcy judges hate to let you out of paying student loans. Moreover, litigating student loan discharges can be a big deal and will likely run up some big legal bills - - $5,000 or more would not be unusual for a reasonably straight forward case.
- Debts for domestic support obligations (DSO's), such as alimony or child support or any financial obligation in a divorce decree or in a Chapter 7 case, a financial obligation in a property settlement agreement. Don't try to solve your marital difficulties in bankruptcy court. Bankruptcy judges and family court judges try hard to stay out of each other's turf.
American Bankruptcy Institute
National Association of Consumer Bankruptcy
USC Title 11 -Bankruptcy
Personal Bankruptcy Information
Bankruptcy Law Network
Start Fresh Today, Inc
Life After Bankruptcy
Lee Ringler is a debt relief agency proudly designated by the US Congress and the President of the United States. Lee has been helping people find solutions to their debt problems, including, where appropriate, getting out of debt under the federal bankruptcy laws for over 20 years in both Georgia and South Carolina. We work under Title 11 of the United States Code to assist you in dealing with your debt. Our office is located at 808 Greene Street, Suite 200, Augusta, GA 30901. This site is intended for marketing material only and is not a substitute for the advice of competent counsel before undertaking any legal course of action. No attorney-client relationship is formed by the viewing of this site, or the request or receipt of any information by means of it.
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