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What debts are not discharged with Chapter 7?

On Behalf of | Mar 3, 2020 | chapter 7 |

One of the benefits of going through a Chapter 7 bankruptcy is the clean slate that results afterward. Many people who go through the process feel a great sense of relief when their debts are finally gone and they can start a new life. However, it is important to know that not all varieties of debt can be absolved through Chapter 7 bankruptcy. Even if you go through Chapter 7, these debts will still be present. According to Findlaw, these debts include student debt, debt as a result of divorce settlements, and debt from wilful or malicious acts.

In the vast majority of cases, student debt will not be discharged through a Chapter 7 bankruptcy. However, there are certain cases where if the court does find the loans the individual is dealing with are causing undue hardship on the individual or the individual’s dependents, a discharge may be possible. However, this is difficult to do since it requires the individual proving that not only can he or she not make payments on the student debt at the time of bankruptcy, but he or she will not be able to pay them in the future. Attempting to discharge a student debt under Chapter 7 requires additional paperwork.

Debts from divorce settlements may not be dischargeable if discharging the debt will cause harm to the recipient of any divorce settlement payments. This includes alimony and child support: you would still be responsible for paying these in the aftermath of a Chapter 7 bankruptcy.

Debt as a result of wilful or malicious acts includes things like embezzlement or larceny. These are not dischargeable under Chapter 7.