What Debts can be Discharged in an Indiana Bankruptcy Filing?

The whole idea behind filing for bankruptcy is to get out from under a mountain of debt and start with a clean slate. Many people do not realize that not every type of debt can or will be discharged when you file for bankruptcy. It is important to reach out to a knowledgeable Indiana bankruptcy attorney to verify the specific debts you are inquiring about to get the most up-to-date information. In the meantime, here is a general overview of what is and what is not dischargeable in a bankruptcy filing.

Dischargeable Debts

The Bankruptcy Code lists nearly 20 types of debts that cannot be discharged. Outside of that, everything else most likely can be discharged. However, if there is any fraud or misconduct involved, the debts could be deemed non-dischargeable. Debts that might be discharged in bankruptcy include:

• Credit card balances, including late fees
• Medical bills
• Civil court judgments (except ones based on fraud)
• Past due utility bills
• Money owed under lease agreements, including past due rent
• Personal loans from family, friends, or employers
• Collection agency bills
• Some auto accident judgments (except those involving drunk driving)
• Dishonored checks (provided no fraud)

Non-Dischargeable Debts

Do not be fooled into thinking you can run up all your credit cards or incur additional debt after you start the bankruptcy filing and it will be covered. Debts incurred after the petition is filed are known as post-petition debts and you are responsible for paying all those even though your case has not concluded. Some debts that cannot be discharged include:

• Child support
• Alimony payments
• Your car loan, provided you want to keep the vehicle
• Debts arising from willful and reckless acts, embezzlement, fraud, or larceny
• Property liens
• Most back taxes
• Debts owed to the government for penalties and fines
• HOA fees
• Court fines, including restitution ordered in a criminal matter

Most student loans cannot be discharged, either, especially right after you stop going to school or graduate. There may be some situations in which a court will allow you to discharge student loan debt if you can show undue hardship or you can show evidence that you have made a good faith effort to repay them over a period of time.

Typically, you cannot discharge unscheduled debts, like anything you failed to include in your petition, unless the creditor was given actual notice or had knowledge of your filing. There are other debts that might normally be dischargeable unless a creditor successfully objects. One example is credit card purchases for luxury goods, typically over $675 and owed to a single creditor, and incurred within 90 days of filing.

Contact an Indiana Bankruptcy Attorney

If you have questions on what can and cannot be discharged in a bankruptcy filing, contact Whitten & Whitten today to schedule an initial consultation.