Can Bankruptcy Erase All of My Debt?

budgeting debt

Accumulating debt doesn’t seem like a major problem initially, but once debt becomes overwhelming, it will come back to haunt you. Thankfully, there are various ways to get rid of debt and get a fresh start.

Bankruptcy is one of the most common tools people use to get rid of debt. But unfortunately, bankruptcy doesn’t eliminate all types of debt. Our Indianapolis bankruptcy attorneys explain which debts can’t be eliminated through bankruptcy.

If you are facing overwhelming debt and creditor harassment, our team at Jackson & Oglesby Law LLC is here to help you. Call us today at (888) 713-5148!

Debts Never Discharged Through Bankruptcy

Unfortunately, not all debts can be discharged through bankruptcy. The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged in Chapter 7 or Chapter 13. Although the debts available for discharge may vary depending on the bankruptcy chapter you file, below are the debts that are almost never discharged through bankruptcy:

  • Child Support and Alimony: Child support and alimony are not eligible for bankruptcy discharge. If you are responsible for paying your ex-spouse’s legal fees or debt, you can’t use bankruptcy to clear these expenses.
  • Government Debt: If you owe taxes to the IRS, student loans, or fines, they might not be dischargeable through bankruptcy. However, there are exceptions to some of these debts. It is best to speak to an attorney to determine if your government debt can be eliminated with bankruptcy.
  • Secured Debts: Any debt secured with some form of collateral, like a mortgage, auto loan, or expensive purchase you’ve financed, like a piece of jewelry, can’t be discharged in bankruptcy. These items you are making payments on still belong to the lenders. Therefore, you either need to give the items back or find a way to make payments.
  • Reckless Debt: If you went on a shopping spree and soon after realized that you can’t pay it back, it won’t likely be discharged through bankruptcy. The court will believe that you had no intention of paying for the items you purchased if you filed for bankruptcy shortly after.
  • Debts You Forget to List: When filing for bankruptcy, you will be asked to list all of your debts. Any debts you forget to list won’t be discharged.

Debts Discharged Through Bankruptcy

Although there are a handful of debts that can’t be discharged through bankruptcy, most debts can. Unsecured debts are debts that aren’t tied to collateral. If you can’t simply return the item to the lender (such as credit card debt), it most likely can be discharged through bankruptcy. Below we have put together a list of debts that can be discharged through bankruptcy:

  • credit card debt, including overdue and late fees
  • collection agency accounts
  • medical bills
  • personal loans
  • utility bills
  • business debts
  • dishonored checks (unless based on fraud)
  • student loans (only in the rare circumstance that you can prove undue hardship)
  • repossession deficiency balances
  • auto accident claims (except those involving drunk driving)
  • money owed under lease agreements (includes past due rent)
  • civil court judgments (unless based on fraud)
  • tax penalties and unpaid taxes past a certain number of years
  • attorney fees (except child support and alimony awards)
  • social security overpayments

Indianapolis Bankruptcy Attorneys

If you have overwhelming debt that can be discharged through bankruptcy, our team at Jackson & Oglesby Law LLC can help you with the filing process. We can analyze your situation to determine which bankruptcy chapter is best for you. We can also help you fill out the bankruptcy paperwork to ensure that all the qualifying debts are accounted for. Let our team guide you through the process from start to finish.

Contact our Indianapolis bankruptcy lawyers today at (888) 713-5148 to schedule a case review!

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