Choosing To Change Your Finances

Can You Discharge All Your Debts With Bankruptcy?

by Luis Hawkins

If you have a lot of debts that you can't pay back, you may be wondering if bankruptcy is the answer. It is important to know which debts will not be able to be discharged in bankruptcy so that you know if you can take advantage of this legal way to gain back your financial freedom. 


There are many types of taxes you may owe, such as property taxes and income taxes. In most situations, taxes are not going to be something that you can discharge, but there are some exceptions to the rule. Make sure to meet with a bankruptcy lawyer with a list of taxes that you owe, and they'll verify if the reason for your financial hardship makes those taxes eligible to be discharged. 

Student Loans

Another debt that you may have are student loans. If this debt was backed by the government, then you will likely not be able to have it discharged. The only way the debt would be eligible is that if you had an undue hardship that made it impossible to pay back the loan. For example, if you are permanently disabled and unable to work.

Family Support Payments

If you are behind on child support or alimony payments, those missed payments will still be owed even after a bankruptcy filing. In addition, be aware that the automatic stay that you receive during bankruptcy will not apply to those support payments. Always make sure that you are up to date on these payments since chances are very likely that you'll still be required to make monthly payments on time. 

Criminal Restitution 

Another debt that you will need to pay back is any criminal restitution that you were ordered to pay by the court. This is going to be a judgment made against you to pay back a victim for a crime you were found guilty of. For example, paying back a victim for stolen goods or damage to a property that they sustained. 

Recently Incurred Debts

Be aware that if you took on any new debts right before filing for bankruptcy, it is possible that you will still have to pay those debts back. Make sure to check with the laws in your area since there are specific timelines for when the purchase took place as well as the dollar value limits on the debt. It's possible that the debt may only apply to things like luxury goods as well, such as jewelry. 

Contact a local bankruptcy lawyer to learn more about your options.