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What Debts Can I Discharge?

What debts can I discharge? What property might I lose if I file for bankruptcy? Those are the two questions that potential clients most frequently ask when they first meet with us. You can discharge an unlimited amount of debt in a chapter 7 case, while in a chapter 13 bankruptcy you must have no more than certain limits of secured and unsecured debt. Those limits are regularly adjusted for inflation.

Beyond that, all unsecured debts can be discharged in bankruptcy except for the debts listed below:

  • Most taxes and customs duties: Especially those taxes in which a tax lien has been filed as it is then a secured debt. However, income taxes are dischargeable if all of the following are true:
    • Three-year rule: The tax year in question is over three years preceding the filing date of the bankruptcy. The three-year period is computed from most recent date the tax return is due for the tax year (typically April 15 of the year following the taxable year). An extension to file the return extends the start date of the period.
    • Two-year rule: You have filed a return for the tax year(s) in question at least more than two years preceding the filing date of the bankruptcy.
    • 240-day rule: The tax claim was assessed at least more than 240 days preceding the filing date of the bankruptcy (plus any period of over-lapping time during which an offer in compromise was pending, plus thirty days) AND the tax return in question was not fraudulent and you have not engaged in activity deemed to be a willful attempt to defeat or evade the tax.
  • Any debts due to creditors that are not listed in your bankruptcy schedules that are filed in the case. (There are exceptions to this but do not risk it. Notice to creditors is critical.)
  • Debts incurred under false pretenses, false representations, or fraud.
  • Any debt resulting from the purchase of luxury or non-essential goods and services from any single creditor over $725 within ninety days prior to filing is presumed to be non-dischargeable.
  • Any debt resulting from credit card or open credit cash advances more than $1,000 within seventy days of filing for bankruptcy are presumed to be non-dischargeable.
  • Any debts that are the result of a willful or malicious injury to another.
  • Any debts resulting from the death or personal injury you caused while operating a motor vehicle or aircraft while intoxicated from any substance.
  • Any domestic support obligations, including any spousal or child support pursuant to a separation agreement, divorce decree, or other order of a court.
  • Any government fines, penalties or forfeitures imposed for any transaction or event within the three years preceding the filing.
  • Student loans unless you can prove paying them would be an “undue hardship.” This is very difficult to demonstrate.
  • Any debts from a prior bankruptcy in which you waived a discharge or were denied a discharge.
  • Any payments of fines or penalties under federal election law.
  • Fees imposed on a prisoner for filing a case, motion, complaint, or appeal.
  • Debts for any federal crimes.
  • Condominium and homeowner association fees or assessments that become due and payable after you file for bankruptcy for as long as you have a legal, equitable or possessory ownership interest in the unit.
  • Money owed due to a loan against a pension, profit-sharing or stock bonus.
  • Many credit unions “cross-collateralize” loans, which means that a credit card account may be secured by other property such as your automobiles. Therefore, those accounts cannot be discharged. Also, your credit union loan may be secured by funds in your credit union accounts, and in such event, the credit union can seize money in these accounts to pay the loan prior to the filing of the bankruptcy petition. Most credit unions will make you close your pension, checking, and savings accounts if you discharge a loan or credit card debt from the same credit union. In such event, you will have to open new checking and savings accounts at a different financial institution. You should examine your loan documents or talk to your credit union if you are unsure whether or not your credit union loan is secured by money in the accounts.

The law regarding “exceptions” from discharge can be very complex and difficult to navigate. The Florida bankruptcy attorneys at the Law Offices of Evan M. Rosen will gladly assist and advise you every step of the way on these issues. If you or someone you know is considering filing for bankruptcy, call us today at (754) 400-5150 or contact us online.

Our country’s history is filled with examples of people who have struggled financially but have gone on to become famously wealthy. They all reclaimed their part of the American Dream and we want to help you reclaim yours! Let the lawyers and staff at the Law Offices of Evan M. Rosen serve you!

Under federal law, we are a "debt relief agency." In addition to other legal services, we help people file for bankruptcy relief under the Bankruptcy Code.

Client Reviews
★★★★★
Mr. Rosen was recommended to us by our friends and we highly recommend him for his excellent service. He represented us in the matter of foreclosure defense. His comprehensive and detailed knowledge of Florida law, federal law, and ongoing relevant cases was key to building a robust and winning strategy for our case. He presented us with several options and the risks associated with each, but ultimately, we picked the one that worked best for us. Mr. Rosen and his legal team are highly professional and always easily approachable via phone or e-mail. Once again, highly recommended. Jadwiga M.
★★★★★
In a few words, Evan Rosen saved my house. He got a final judgment in my favor. The judge gave the bank many opportunities (continuance of the trial even a mistrial) to solve all the issues that Evan Rosen will bring up to the judge (issues that were wrong with my case). In the end, his arguments could not be overlooked by the judge and Evan won the judgment in favor of the defendant (me) and an involuntary dismissal of the case. If you want to have the best chances to win your foreclosure case, you need Evan Rosen on your side. He is the Super Lawyer. I have seen him flying out of the courthouse. Oscar D.
★★★★★
I am so grateful first to god and for the blessing of putting attorney Evan Rosen and his team of professional, in our lives. If you are going through a foreclosure and don't know what to do, I can honestly tell you that attorney Evan Rosen is the person to talk (855-55-Rosen) he takes his time to hear your situation and never sugar coats anything and he does not give you false hope. He is an attorney that you can be sure will fight the fight for you. I know nowadays it's hard to find an attorney that you can trust, but know this, you will not regret the day you choose him. Julie D.