Can all debts be discharged in bankruptcy?
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A bankruptcy filing can help you take care of many of your debts. However, not every debt that you have will simply go away when you file bankruptcy. There are some debts that cannot be discharged, and others that, in certain chapters of bankruptcy, must be partially repaid before being discharged.
There are certain types of debt that you may not generally alter with a bankruptcy filing. For example:
- Student loan debt is given a great deal of protection under the law. Those who have unpaid student loan debt may not discharge this debt in bankruptcy unless they can show "undue hardship." This essentially means showing that there is no way, either now or in the future, that they will ever be able to repay the student loan debt. This is an almost impossible standard to meet. There are efforts in place, as of 2010, to make student loan debt more easily dischargeable in order to protect students, but most of the laws currently in place are favorable to lenders over debtors.
- Certain types of tax debt and back or unpaid income taxes aren't dischargeable.
- Unpaid child support or other support payments, such as alimony, are also generally not dischargeable in bankruptcy. Back alimony may sometimes be reduced in limited circumstances, but child support almost never is.
Further, if you file a chapter 13 bankruptcy instead of a chapter 7 (either because you do not qualify for chapter 7 or because you wish to keep your assets), you will not be able to discharge debts immediately. Instead, you will create a plan to repay part of those debts over three to five years.