Personal Bankruptcy Non-dischargeable Debts

Avoiding problems with personal bankruptcy non-dischargeable debts

A few debts are not dischargeable in personal bankruptcy. The logic behind exclusion falls into several categories. Involuntary liability forced upon others is not generally dischargeable. Liability created by operation of law is not generally not dischargeable. Liability for restitution of crimes and mistreatment of others will not be discharged. The overriding public interest remains consistent: - debts forced upon others rather than accepted by agreement must be repaid and are not dischargeable in personal bankruptcy.

Nondischargeability in personal bankruptcy

When a debt is excluded from a personal bankruptcy discharge, it remains in full force and payable as if the case had not been filed. Courts grant permission for creditors holding non-dischargeable debts to continue collection through all legal means. Alimony is a prime example. Alimony must be included within the personal bankruptcy schedules because it is a legally payable obligation. As a creditor, the divorced spouse automatically receives notice under chapter 7 bankruptcy laws. The date, time and place of the meeting of the creditors (attendance mandatory for the debtor) is provided within the notice. Following the meeting, subsequent arrest or non-payment of child support is simple for local constables who are tipped off by a disgruntled spouse.

Specific non-dischargeable debts in personal bankruptcy

A specific list of non-dischargeable debts is provided by 11 U.S.C. 523. A few of the most common exceptions to discharge include:

customs duties, federal, state and county taxes;
credit obtained by fraud, concealment or false pretenses;
written statements of financial condition published to deceive;
debts for luxury goods within obtained within 60 days of filing;
liability for cash advances obtained within 60 days of filing;
revolving credit accounts, credit cards, installment credit, unsecured credit obtained within 60 days of filing;
liability for crimes, including larceny, embezzlement, fraud, defalcation and theft committed before or during a personal bankruptcy case;
restitution for crimes, including larceny, embezzlement, fraud, defalcation and theft committed before or during a personal bankruptcy case;
court orders for payment of restitution for crimes, including larceny, embezzlement, fraud, defalcation and theft committed before or during a personal bankruptcy case;
alimony, child support, debts payable to a spouse under a divorce decree, payment for failure to deliver property under a divorce decree incurred before or during a personal bankruptcy case;
debts assigned to governmental authorities for collection;
liability for malicious injury to others committed before or during a personal bankruptcy case;
judgments for liability for malicious injury to others committed before or during a personal bankruptcy case;
student loans obtained before or during a personal bankruptcy case;
personal injuries caused to others while intoxicated, DWI, DUI or chemically impaired;
debts which were not discharged in a prior case under chapter 7 bankruptcy laws; and
fraud or deception committed against depository institutions.