Any Texas resident can experience financial difficulties. Often times, people use credit cards and other unsecured lines of credit to make ends meet or to maintain a certain level of living. While using unsecured credit may be necessary during certain situations, using it as long-term solution to your financial problems and not paying off the balance on credit cards each month can cause even more financial woes.
Whether you lost your job, experienced an unexpected medical emergency or you were simply living beyond your means, you may be one of the many individuals in Texas now facing an insurmountable debt load.
If you find yourself in this situation, you likely discovered that you can no longer make the required payments on your various credit accounts and still have enough money left over for basic living expenses. While you may be considering Chapter 7 or Chapter 13 bankruptcy as a means for relief from your overwhelming debt, you may be wondering if the process will eliminate everything you owe.
Debts You Cannot Discharge
The U.S. Bankruptcy Code specifies the types of debts you cannot discharge through either Chapter 7 or Chapter 13 bankruptcy. It will still be your responsibility to pay these debts during the bankruptcy process and after it has been completed.
- Back alimony and child support as well as other family support obligations
- Student loans, unless you would experience an undue hardship if you had to repay the loan
- Court-ordered fines, penalties and judgments
- Income tax debt from the last three years and other types of tax debt
- Debts you fail to list in your bankruptcy filing
Other Debts You Cannot Discharge through Chapter 7 Bankruptcy
Along with the debts listed above, you also may not discharge certain debts if you file for Chapter 7 bankruptcy and the creditor challenges your discharge request. These types of debts include any of the following:
- Debts you incurred as a result of committing fraud, embezzlement or other illegal activities
- Debts or cash advances totaling $1,150 or more you incurred 60 days before your filing
- Court-ordered debts you owe to personal injury victims for malicious or willful injury or property damage
- Debts you assumed after a divorce settlement, with certain exceptions
You must also keep in mind that you will have to keep up with payments for secured debts, such as car loans and mortgages, if you intended to keep those types of properties. While it may be possible to discharge these types of debt using property exemption options, you would need to consult with your attorney to determine if you qualify.
While you may not be able to discharge every debt you have through either Chapter 7 or Chapter 13 bankruptcy, eliminating the debts you can will allow you to use the leftover funds to pay down the debts you cannot discharge. In order to determine all of the options you have available, you would need to consult with an experienced bankruptcy attorney. Such an attorney can help with all aspects of the filing process and help put you on a path to financial recovery.