I thought bankruptcy always discharged all of my debts?
WRONG. There are certain debts that cannot be discharged by bankruptcy. Generally speaking, these debts include:
- unscheduled debts,
- court-ordered child and spousal support,
- past due child and spousal support,
- unpaid federal income taxes,
- federal tax liens,
- unpaid student loans.
- some unpaid state taxes depending on the state,
- government penalties and fines, and
- certain pension payments.
However, each category of non-dischargeable debt includes conditions, exceptions, and nuances which must be studied to determine how to best handle the debt.
For example, even if you failed to schedule a debt, if you had virtually no assets, the bankruptcy court may still discharge the unscheduled debt because it didn’t matter. Also, if a creditor knew about your bankruptcy, that may be enough, even if you failed to list that debt.
Another example pertains to unpaid income taxes. If your unpaid income taxes are more than three years old, they may be dischargeable after the debtor honors a 3-5 year reorganization plan. In this instance, the debt does not follow you to the grave.
Thus, today’s featured article provides important details on the details and nuances of non-dischargeable debts. It’s worth a read.