Three Important Debts That You Cannot Discharge in a Florida Bankruptcy

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Three Important Debts That You Cannot Discharge
in a Florida Bankruptcy
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• When you file for bankruptcy relief, your goal is
  to get out debt. For that reason, you want to
  discharge as many of your debts as possible.
  While most unsecured debts are eligible for a
  discharge in Chapter 7 and Chapter 13, several
  debts cannot be discharged in bankruptcy.
• Common debts that are not eligible for a
  bankruptcy discharge include
• Alimony or spousal support
• Child support
• Most debts owed to government entities
• Income Taxes
• Student Loans

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• In some cases, a debtor can discharge income
  taxes if the taxes meet all of the requirements
  for discharge of old tax debt. Furthermore, some
  debtors qualify for a hardship discharge of
  student loans. However, most income taxes and
  student loans are not dischargeable in a
  bankruptcy case.

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Are There Other Debts That Are Not Dischargeable?

• Yes, other debts may not be dischargeable in a
  bankruptcy case. Creditors may file an objection
  to discharge to stop the debts from being
  discharged pursuant to bankruptcy laws. An
  adversary proceeding is a lawsuit within the
  bankruptcy court seeking various relief.
  Creditors who believe that their debts are not
  eligible for a discharge under bankruptcy laws
  may file an adversary proceeding in your case.

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• Defending an adversary proceeding can be
  expensive and time-consuming. It is always best
  to disclose all information to your Florida
  bankruptcy attorney about your debts. Your
  bankruptcy lawyer can deal with a variety of
  issues within a bankruptcy case, but he must know
  about the issues to deal with them effectively.

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Debts That May Be Allowed After a Creditor
Objects to Discharge or Files an Adversary
Proceeding

• Three debts that might be allowed if a creditor
  or party files an adversary proceeding under
  Bankruptcy Code 523 are

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Debts for Luxury Goods Within 90 Days of Filing
Bankruptcy

• Under 523 of the Bankruptcy Code, the court may
  declare a debt non-dischargeable if the debt was
  incurred under false pretenses, a false
  representation, or actual fraud. The code
  section does not explain or define these terms.
  Therefore, the court applies the decisions in
  previous cases to determine if a debt was
  obtained under fraud or false pretenses when a
  creditor objects to discharge based on these
  grounds.

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• One of the common types of transactions that fall
  within this category is the purchase of luxury
  goods within 90 days before filing your
  bankruptcy petition. If you incurred consumer
  debt to purchase 675 in luxury goods or
  services within the 90 days of filing your
  bankruptcy petition, the court will presume the
  debt is non-dischargeable unless you can prove
  that there was no intended misrepresentation or
  fraud.

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• The creditor does not need to prove that you did
  not intend to pay the debt to win the case
  because of the automatic presumption that you
  knew you would be filing for bankruptcy relief
  within three months and would not be required to
  repay the debt.

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• Luxury goods or services do not need to be
  high-dollar, brand name, or designer goods and
  services. Goods and services may fall into this
  category if they are not reasonably necessary for
  your maintenance or support or the maintenance
  and support of your dependents. Convincing the
  court what is reasonably necessary could be an
  uphill battle.

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Credit Card Debt Incurred to Pay Debts That Would
be Non-Dischargeable

• Credit card debt that is not incurred through
  fraud, misrepresentation, or other illegal
  circumstances is typically dischargeable in
  bankruptcy. Most debtors discharge all credit
  card debt when they file for bankruptcy relief.
  However, a creditor may object to your discharge
  if you used your credit cards to pay debts that
  would otherwise be non-dischargeable in your
  bankruptcy case.

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• For example, domestic support (alimony, spousal
  support, and child support) is non-dischargeable
  in a bankruptcy case. Most student loans and
  income tax debts are also non-dischargeable in
  Chapter 7 and Chapter 13 cases. If you use your
  credit cards to pay these debts before filing a
  bankruptcy case, the creditor may successfully
  challenge the discharge.
• The theory is that a debtor should not be allowed
  to use credit that is typically dischargeable to
  get rid of debts that the debtor is legally
  liable to pay regardless of whether the debtor
  obtains a bankruptcy discharge.

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Damages Related to Intentional Acts That Cause
Another Person Injury or Damages

• Section 523(a)(6) prohibits a debtor from
  discharging debts that are incurred because of
  the willful and malicious injury to another
  person. These acts are known as intentional
  torts, including personal injury judgments and
  settlements.

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• A common example of a debt that is typically not
  eligible for discharge under this section would
  be a personal judgment related to a drunk driving
  accident or a drugged driving accident. Another
  example would be if the debtor intentionally
  caused another person injury by assaulting the
  person physically.
• For example, if a debtor has a personal injury
  judgment arising from a DUI accident for 50,000,
  that debt would probably not be dischargeable in
  a bankruptcy case.

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Notify Your Orange Park Bankruptcy Attorney of
Unusual Issues Immediately

• Even though you may owe a debt that is
  potentially non-dischargeable, there might be a
  way to file for bankruptcy relief to get rid of
  the debt. For instance, the timing of your
  bankruptcy filing may be adjusted to decrease the
  chance the creditor may file an adversary
  proceeding objecting to discharge. However, your
  attorney must be aware of the issue to develop a
  strategy for dealing with any potential problems.

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• Being honest and upfront with your bankruptcy
  attorney is the best way to avoid problems in
  your bankruptcy case. Your attorney is your legal
  advocate to protect your best interest. Help your
  attorney by disclosing all information, even if
  you do not think it may be relevant.

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• Contact an Orange Park Bankruptcy Attorney for
  More Information About Debts You Can Discharge in
  Bankruptcy
• Bankruptcy lawyer Tony Turner assists clients in
  filing bankruptcy and exploring other debt relief
  options. If you want to discuss ways to eliminate
  your debts, Contact The Law Office of Tony Turner
  for a free consultation. Call [phone] now
  to speak with an experienced bankruptcy lawyer in
  Orange Park, Florida.