WHAT DEBTS ARE ERASED BY A BANKRUPTCY?
All debts are erased when a person is discharged from bankruptcy except for the following: • Fines imposed by a court; • Debt incurred by misrepresentation or fraud; • Alimony or maintenance payments; • Debt for damages imposed by a Civil Court for intentional bodily harm, sexual assault or wrongful death; • Student loans, if bankruptcy occurs within 7 years of ceasing to be a full or part time student. Also, bankruptcy does not generally interfere with secured debts (i.e. a mortgage or vehicle lease) if there is no equity in the secured asset.
Most debts are erased after 9 months when the person is discharged form bankruptcy. Most debts are erased when the person is discharged from bankruptcy (usually in 9 months). The following debts are not erased: • Fines imposed by a court; • Debt incurred by misrepresentation or fraud; • Alimony or maintenance payments; • Debt for damages imposed by Civil Court for intentional bodily harm, sexual assault or wrongful death; • Student loans, if bankruptcy occurs within 7 years of ceasing to be a full or part time student. Also, bankruptcy does not generally interfere with secured debts (i.e. a mortgage or vehicle lease) if there is no equity in the secured asset.
Most unsecured debt is erased in a bankruptcy except for: • Child support and alimony; • Debts for personal injury or death caused by your drunk driving; • Student Loans. • Income tax debt. Note on Private Student Loans: On June 7 2007, US Senator Dick Durbin introduced a Bill to make private student loans dischargeable in bankruptcy, as they were before 2005. The 2005 changes to the U.S. Bankruptcy Code made the treatment of private student loans equivalent to the treatment of government-guaranteed student loans, which were not dischargeable. This bill would reverse the 2005 amendment, so that private student loans again would be fully dischargeable in bankruptcy. More Detailed information about debt that might survive bankruptcy The following debts are not erased in both Chapter 7 and Chapter 13. If you file for Chapter 7, these will remain when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your plan. If they are not, the balance will
