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Which debts cannot be discharged in a personal bankruptcy?

Many people in Rockland County have filed Chapter 7 bankruptcy petitions thinking that all of their debts will disappear at the close of the proceeding. Unfortunately, several different kinds of debts are exempt from discharge. Knowing which debts cannot be discharged may assist in making the decision about whether to file a bankruptcy petition.

Any debt that is not listed on the schedules filed with the petition will not be discharged. Student loans cannot be discharged, unless the debtor can show that repayment would constitute an undue hardship. Federal, state and local taxes cannot be discharged. Likewise, government-imposed restitution, fines, penalties and court fees are exempt from discharge. Many people seek bankruptcy protection to escape child support and alimony obligations, but these debts cannot be discharged. Debts stemming from damages assessed against the debtor for driving while intoxicated cannot be discharged. Debts owed to pension plans and condominium dues are also beyond discharge.

Many debts that were created by the debtor's bad actions prior to bankruptcy cannot be discharged if the creditor objects to the discharge and shows that the debt falls into one of these categories: debt arising from a fraudulent act, debts incurred for luxury goods and services within 90 days prior to the filing of the petition, debts arising from willful and malicious acts and debts created by embezzlement, larceny or breach of a fiduciary duty. A debt created by a divorce settlement or judgment cannot be discharged if the debtor can afford to pay the debt and if detriment to the recipient exceeds any benefit to the debtor.

The discharge of a specific debt may depend upon the particular financial situation of the debtor. Moreover, whether a particular debt falls into a non-dischargeability category may turn on complex legal or factual issues.

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