Filing for bankruptcy could be a stressful process. It could involve a series of procedures, such as filing a bankruptcy petition with the court. All these steps are necessary to organize and resolve debts or repayments. A vital part of this process is determining which debts to discharge.
A bankruptcy discharge removes the debtor’s liability for the specific debt. The court enforces this decision, resulting in a permanent order that stops creditors from going after payments. Discharges could happen in both Chapter 7 and 13 bankruptcies. However, there are debts exempted from discharge. The following financial obligations could be nondischargeable:
- Specific tax claims
- Debts that require filing with the court
- Spousal support
- Child support
- Willful or malicious damages to individuals or property
- Fines or sanctions
- Educational loans
- Overpayments of benefits
- Owed compensation for personal injuries
- Retirement plans with tax advantages
- Certain types of housing fees
Still, exceptions could vary based on the circumstances. The court must assess the situation first before granting discharges. Sometimes, they might only allow discharges if the debtor settles payments based on the approved repayment plan. Other times, the debtor could ask the court for a hardship discharge despite missing required payments. These options could vary based on the debtor’s situation and the case details.
Going through the bankruptcy process is challenging. The tedious details of the process could cause twists and turns, making navigating difficult. Additionally, some options might have elements that could be advantageous or disadvantageous based on the debtor’s requirements. Fortunately, seeking legal counsel could help clarify any issues and vague circumstances. Doing so could also help determine the best action when problems arise.