Interviewer: You mentioned previously that some debts cannot be discharged in bankruptcy. What debts typically can and what debts can’t?
Student Loans Cannot Be Discharged
Court: The most well-known type of loan that can’t be eliminated in bankruptcy is student loans. There has been a lot of discussion about that in the national news recently. You can’t have student loans discharged.
You Will Receive a Short-Term Reprieve from Student Loan Obligations While Your Bankruptcy Is Being Processed
What will happen when you file bankruptcy is when the automatic stay that I was talking about earlier goes into effect you will receive a temporary reprieve for your student loans while the case is being administered. After that process is complete, you’ll have to return to your loan payment schedule again.
You’ll get a period of time where you don’t have to pay them, without incurring penalties, but eventually you will have to resume making payments.
Domestic Support Payments Will Not Be Discharged in Bankruptcy
The other obligations that can’t be discharged are domestic support payments, and if you owe alimony or child support, that can’t be taken care of in bankruptcy.
Criminal Restitution Payments and Back Taxes will Not Be Discharged in a Bankruptcy Filing
If you have to fulfill a criminal restitution, you can’t discharge that by filing bankruptcy. Some taxes you can get rid of, but a lot of taxes you won’t be able to discharge in bankruptcy. So those are the main ones that I see.
Interviewer: What about old judgments. Can you have those discharged?
Credit Card Debt, Medical Bills and Back Rent and Mortgage Payments Can Be Discharged in a Bankruptcy Filing
Court: Yes, you can discharge judgments, in general. Judgments from debt collection, any credit card debts or medical bill are going to be dischargeable. Also included are back rent payments, back utilities. Even if you have a mortgage, that’s going to be covered.
Most obligations really are covered. Excluded are just a few obligations such as the student loans and taxes. In general, everybody is going to be able to get discharged for most everything that they owe.