Filing for bankruptcy is a way for people with substantial debt to get a fresh start. Chapter 7 bankruptcy helps remove many debts completely and Chapter 13 bankruptcy in NJ reduces debt and helps restructure payment plans. Not all forms of debt can be removed with a successful bankruptcy filing. During a bankruptcy proceeding, it is crucial that you are honest and cooperative. Having an experienced New Jersey bankruptcy attorney on your side can make the difference between having your allowable debts discharged and having your bankruptcy protections denied.
Debts That Cannot Be Discharged
Not all debts can be discharged in a Chapter 7 or Chapter 13 filing. Such debts include:
- Debts that are accrued through fraud, misuse of funds, larceny or embezzlement: Filing for bankruptcy will not eliminate debts that arise out of illegal activity.
- Debts accrued under false pretenses or false financial statements: Bogus representation and fraud may lead to debts that cannot be discharged.
- Student loans: In most cases, student loans can be restructured if necessary but they cannot be discharged completely.
- Alimony and child support: All debts from divorce or separation including alimony and child support will not be removed by filing for bankruptcy.
- Some cash advances: Cash advances made shortly before filing for bankruptcy will need to be repaid.
- Certain tax debts: Bankruptcy court can help settle debt disputes between debtors and the IRS but it cannot remove all types of tax debts.
- Orders of restitution: Filing for bankruptcy will not eliminate debts resulting from negligence or wrongdoing.
- DUI accident claims: If you are found liable for an injury accident when you were under the influence of drugs or alcohol, the resulting accident claim will not be eliminated through bankruptcy.
If the court deems that a debt is acquired through fraudulent means, it will not be discharged. An example of fraudulent debt is if you purposely drove up your credit card debt shortly before you filed for bankruptcy. Your credit card activity over the last 90 days will be taken into consideration. Another example of fraudulent debt involves loan applications. Lying on a loan application will make you liable for that loan without the opportunity to have it discharged. While bankruptcy laws serve to protect those who are in financial trouble, they also protect creditors from fraudulent activity.
Debts That Can Be Discharged
The number of debts that can be discharged by filing for Chapter 7 bankruptcy is significant and is what makes it such a worthwhile option for people with substantial personal debt. Medical bills, personal loans, credit card debt and tax penalties that are over three years old may all be considered for elimination in Chapter 7 bankruptcy.
Contacting a NJ Bankruptcy Lawyer
If you have debts that you will not be able to repay in the near future, please do not hesitate to call the law offices of Robert Manchel at 866-503-5655. Our New Jersey bankruptcy lawyers will offer a no-cost evaluation of your case and help you determine the best course of action.