The very last step of your bankruptcy process may be a discharge. Now, a bankruptcy discharge is essentially a court order that absolves you from paying off certain debts. In turn, it bars your outstanding creditors of these debts from coming after you for payments through collection activities. You must understand that not all your debts will be eliminated at this time. Also, even your eligible debts may not be eliminated if the court finds that circumstances do not permit it. With all these things considered, please read on to discover what debts are eligible for a bankruptcy discharge and how a seasoned Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can work to ensure you are given this opportunity for further financial relief.

What debts are and are not eligible for a bankruptcy discharge?

On the one hand, most consumer debts are considered eligible for discharge. This may be particularly good news for you if your financial troubles are mostly due to different consumer debts. On the other hand, though, the United States Congress has decided that certain debts should not be able to be discharged, primarily due to public policy reasons. More specific examples of each read as follows:

  • Dischargeable debts:
    • Medical bills.
    • Personal loans.
    • Credit card debts.
    • Financial obligations under lease agreements or other contract types.
  • Nondischargeable debts:
    • Outstanding spousal support and child support payments.
    • Outstanding fines owed to a United States government agency.
    • Tax debts or tax liens.
    • Student loans, under certain circumstances.
    • Restitutions or criminal fines ordered from your criminal case.
    • Compensatory or statutory damages ordered from your drunk driving case.
    • Debts you otherwise failed to list in your initial bankruptcy petition.
    • Debts resulting from fraud, embezzlement, larceny, or breach of fiduciary duty.

Under what circumstances may I be denied a bankruptcy discharge?

It cannot be stressed enough that your dischargeable debts are not guaranteed to be automatically eliminated from your immediate responsibility after your bankruptcy case. For this, it is in your best interest to wait for an official discharge order from the bankruptcy court’s clerk, which may outline the specific debts directed to a discharge. In a much more serious sense, though, certain circumstances may call the bankruptcy court to deny a discharge altogether. More specific examples of such circumstances read as follows:

  • The bankruptcy court finds that you lied under oath, concealed assets, or wrongfully transferred property during your case proceedings.
  • The bankruptcy court finds that you failed to produce adequate financial records and tax documents they specifically requested of you.
  • The bankruptcy court finds that you filed your bankruptcy petition too soon after your previous bankruptcy case took place.
  • The bankruptcy court finds that you failed to complete an approved credit counseling course as one of the final required steps of your case proceedings.

We hope that this blog offers the insight you were searching for. For more information, we encourage you to contact a competent Louisville, Kentucky consumer bankruptcy lawyer from Schwartz Bankruptcy Law Center today.