Bankruptcy TipsIf you are thinking of filing for Bankruptcy, it is worth taking a mental inventory of the debts you are hoping to have discharged. It is important because some of the types of debts you have may not be dischargeable.

Although there may be exceptions to the rule, and laws sometimes have nuances, the following types of debts are typically not dischargeable in Bankruptcy:

  • Non-dischargeable tax obligations
  • Debts arising from property settlements in divorce or separation proceedings
  • Debts for spousal support or alimony
  • Child support 
  • Governmental debts (fines or penalties)
  • Debts for willful and malicious injuries to person or property
  • Student loans guaranteed or funded by the government
  • Debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated (additional personal injury related debts may also be non-dischargeable)
  • Debts owed to certain tax-advantaged retirement plan
  • Debts for certain condominium or cooperative housing fees

The reasoning behind some of these categories is the protection of otherwise helpless parties, ensuring the government is able to collect its revenues, and a general safeguard against the process being used fraudulently, as a way to escape paying final judgments, and the like.

For example, it is a law school legend that the ban against discharging student loans is thanks to some sharp law school grad who filed to discharge his law school loans the day after he graduated (or some other similarly short period of time) from Yale, in order to avoid having to pay any of them back.

You can find out more about the types of debts that are non-dischargeable here.  Alternatively, if you are ready to file or schedule an initial consultation, you can find a Bankruptcy Lawyer to evaluate your case.