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Non-Dischargeable Debts

Chapter 7 and Chapter 13 bankruptcy allows individuals in financial distress the chance to wipe away or reorganize serious debt. However, certain debts that cannot be eliminated or mitigated through bankruptcy proceedings are known as non-dischargeable debts.

Unfortunately, many people believe they are safe from all creditors under bankruptcy protection. This is simply not true. Debts that are eligible for discharge or reorganization often include personal loans, credit card account balances, and medical bills.

In most cases, bankruptcy filers are still responsible for the following types of non-dischargeable debt:

  • Student loans
  • Federal, state, local taxes owed within the last three years
  • Child support
  • Spousal support
  • Tax liability on shorts sales
  • Punitive damages from lawsuits
  • Criminal fines
  • Debts arising from fraudulent acts
  • Debts arising from illegal activity
  • Debts owed under a divorce decree or marital settlement agreement

While you cannot eliminate non-dischargeable debts, there are ways to get them under control. An Orange County lawyer can negotiate with your creditors to reduce your outstanding debts. Financial institutions, including the IRS are realistic – they would rather settle for partial payment than risk never receiving the funds.

Always be honest about your debts when speaking with your bankruptcy lawyer. Your case may be dismissed or you may face criminal charges if you try to conceal information from the bankruptcy court. By being truthful regarding all your finances, you will be able to receive the fresh start you so desperately need.

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