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Helping People Get A Fresh Financial Start to Regain Financial Independence

Not all debts are forgiven in a Chapter 7 bankruptcy

On Behalf of | Feb 1, 2023 | Chapter 7 Bankruptcy

If your debt is overwhelming and you are considering filing for bankruptcy, you should know you are not alone. Chapter 7 bankruptcy is the most common form of bankruptcy, with over 10,000 Chapter 7 bankruptcy cases filed in Indiana in 2021, according to the American Bankruptcy Institute.

Filing for Chapter 7 bankruptcy can give you a chance to eliminate a good amount of debt without having to give up any major assets. However, before you decide to go forward, you should consider that only unsecured debts can be discharged in a Chapter 7 bankruptcy. The following debts are generally not dischargeable in a Chapter 7 bankruptcy:

  • Tax debts (e.g., tax liens)
  • Alimony/child support
  • Debts owed for death/personal injury caused by driving under the influence
  • Restitution fines
  • Government debts
  • Debt not included or improperly included in your bankruptcy petition

Student loan debts can be discharged in some cases, but they require special considerations.
Even if your debt is considered dischargeable, a creditor can appeal to the court to deny the discharge of the debt. A denial may occur if you:

  • Disobeyed a court order
  • Attempted to defraud a creditor by hiding or destroying property etc.
  • Concealed or destroyed financial information
  • Cannot properly explain a loss of assets

Filing for bankruptcy does not automatically make all your debt disappear without consequences. If you are trying to decide whether Chapter 7 bankruptcy is right for you, consider speaking to an experienced bankruptcy attorney. Your attorney can evaluate your financial situation and help determine which type of bankruptcy, if any, is right for you.

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