Which Debts Are Not Dischargeable in a New York Bankruptcy Filing?

Bankruptcy is a major financial decision that requires careful consideration before moving forward. It’s important to understand that there is no shame in filing for bankruptcy, despite what public perception may be. People face these decisions to eliminate insurmountable debts every day, and we want to empower the people of New York to make the right financial decisions given their own situations.

Chapter 7 bankruptcy can alleviate some, but not all, of your debts by liquidating some of your assets to satisfy a portion of what you owe to creditors. Chapter 13 bankruptcy, on the other hand, involves agreeing to pay a portion of the debts you owe over a period of time. Before you go through the process, it’s crucial to know which debts can’t be discharged, so you don’t end up with a filing on your credit report that doesn’t accomplish your financial goals.

Certain Unpaid Taxes

You won’t be able to escape all tax debts through bankruptcy. For example, tax liens used to secure the property you owe debt on are non-dischargeable. Most tax debts incurred within the last three years are also non-dischargeable. However, tax debts beyond that timeline are often dischargeable, providing some relief for older obligations.

Spousal Support and Child Support

Alimony (often called Spousal Support) and child support are not dischargeable through bankruptcy. These are debts you owe directly for the care of an individual. Courts recognize the financial commitment to your ex-partner or child as essential for their growth and maintaining a healthy lifestyle. Therefore, you can’t avoid these obligations through bankruptcy.

Debts Related to Willful and Malicious Injury to Another Person or Property

If you’ve caused intentional harm to another person or their property, bankruptcy won’t help you escape these debts. This includes debts owed for helping someone recover physically or restoring their property. The same principle applies to debts arising from incidents like drunk driving that result in injury or damage. These obligations remain your responsibility despite bankruptcy.

Student Loans

Student loans, the largest debt for many Americans, are generally not dischargeable through bankruptcy. Unless you can prove that the debt causes undue and unreasonable stress and harm to your life, these loans stay with you. This protection of student loan debt from the bankruptcy process was established by the Education Amendments of 1976, making it a significant challenge for those looking to discharge this type of debt.

Prepare for Bankruptcy with Drucker & Mattia

Navigating personal bankruptcy can be challenging, but you don’t have to do it alone. At Drucker & Mattia, we understand how burdensome these debts may feel for you. We are here to help you make sound financial decisions and prepare for the bankruptcy process. If you’re considering filing for bankruptcy in New York, contact Drucker & Mattia for the legal support you need.