Need Legal Help for Your Business? Find It Here
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Need Legal Help for Your Business? Find It Here

When my husband I decided to start a business, we didn't think about the legal aspects of doing so. We didn't realize that purchasing business insurance, getting building permits and making investments all required some type of legal advice. But after speaking to a close friend, who also happens to own a small business, we contacted a business attorney. Now, we have the legal smarts to make the best decisions for our business, as well as the legal representation in case something happens to our company. I hope that you find my blog helpful and informative for your own business. It's a great resource for finding the legal advice, resources and guidance you need to get your company up and running.

Need Legal Help for Your Business? Find It Here

Debts That Are Not Typically Discharged In A Chapter 7 Bankruptcy Case

Ronnie Mills

One significant advantage of using chapter 7 bankruptcy instead of chapter 13 is the debt forgiveness you receive through chapter 7. Chapter 7 bankruptcy discharges debts instead of requiring repayment of those debts, but it does not provide a discharge for all debts. Some are not included or available through this branch of bankruptcy, and you should know what these are before you file. Here are some of the debts that a chapter 7 case will not discharge.

Recent Luxury Purchases

When you file the documents necessary for a chapter 7 case, a bankruptcy trustee reviews them. As the trustee reviews your documents, he or she looks closely at your credit card debts to see if you charged anything recently. If you have new charges on your statements for luxury items, you probably will not receive a discharge for those charges. The trustee may look back at the last 90 days or longer to see how you used your credit cards.

IRS Tax Debts

People sometimes receive a discharge of IRS back tax debt, but this is not the norm. You must meet several conditions to qualify for a discharge of tax debt, and most people do not meet these conditions. If you owe money to the IRS before you file for chapter 7, you will likely still owe this money to the IRS after you file.

Student Loans

In most cases, student loans do not qualify for discharge either. You must meet conditions to qualify for this discharge, and most people do not meet these. If you owe student loan debt that you cannot repay, talk to your lawyer about the options you can use to eliminate or lower it.

Mortgage for a House You Keep

Your bankruptcy attorney can help you decide if you should or can keep your house during your chapter 7 case. If you can keep the house and want to keep it, you will not qualify for a discharge of arrearage on the loan. You must repay this money if you file for chapter 7 and want to keep this property.  

Court Fees You Owe

You cannot discharge court fees during a chapter 7 case. You will incur fees when filing for chapter 7, but you must pay those fees as they are not dischargeable.

This list is not extensive, but it should give you an idea of the debts you will still owe if you file for chapter 7. If you have questions about bankruptcy or the debts you owe, talk to a bankruptcy lawyer.