Three Debts That You Cannot Discharge in a Florida Bankruptcy!

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Scales of Justice, wooden mallet, discharge debt, student loansWhen a debtor files for bankruptcy relief, the “end game” is to get out of debt.  Most unsecured debts are eligible for a discharge in Chapter 7 and Chapter 13 bankruptcy discharge. But there are several debts that one cannot discharge in bankruptcy including: alimony or spousal support; child support; most debts owed to government entities; income taxes; and student loans. In some cases, a debtor can discharge income taxes if the taxes meet all of the requirements for discharge. Creditors may object to a debtor receiving  a bankruptcy discharge by filing an adversary proceeding with the court.   An adversary proceeding is a lawsuit filed with the bankruptcy court. 

Debts for Luxury Goods Within 90 Days of Filing Bankruptcy. Under §523 of the Bankruptcy Code, the court may declare a debt non-dischargeable if the debt was incurred under “false pretenses, a false representation, or actual fraud.” The code section does not explain or define these terms. 

One of the common types of transactions that fall within this category is the purchase of luxury goods within 90 days before filing your bankruptcy petition. If you incurred consumer debt to purchase $675 in “luxury” goods or services within the 90 days of filing your bankruptcy petition, the court will presume the debt is non-dischargeable unless you can prove that there was no intended misrepresentation or fraud. The creditor does not need to prove that you did not intend to pay the debt to win the case because of the automatic presumption that you knew you would be filing for bankruptcy relief within three months and would not be required to repay the debt.

Damages Related to Intentional Acts That Cause Another Person Injury or Damages.  Section 523(a)(6) prohibits a debtor from discharging incur debts because of the “willful and malicious injury” to another person. We can call these acts “intentional torts,” including personal injury judgments and settlements. A common example of a debt that is typically not eligible for discharge under this section would be a personal judgment related to a drunk driving accident or a drugged driving accident. Another example would be if the debtor intentionally caused another person injury by assaulting the person physically.

Contact an Orange Park Bankruptcy Attorney for More Information About Debts You Can Discharge in Bankruptcy.  Bankruptcy lawyer Tony Turner assists clients in filing bankruptcy and exploring other debt-relief options. If you want to discuss ways to eliminate your debts, Contact The Law Office of Tony Turner for a free consultation. Call (904) 679-2020 now to speak with an experienced bankruptcy lawyer in Orange Park, Florida.


Bankruptcy Petition Filing Statistics!

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According to the Bankruptcy Petition filing statistics, consumers filing for bankruptcy in 2017 reported total assets of $80 billion and total debt of $105 billion, according to an annual report filed by the Judiciary with Congress. The report, required by Congress under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  Some notable highlights in the report are:

  1. Sixty-two percent of assets were real property, and the remaining assets were personal property.
  2. Debtors in the Northern District of California and in the Southern District of Florida reported the highest average assets per petition, at $583,000 and $338,000, respectively. Filers in the Western District of Tennessee reported the lowest average assets, $44,000.
  3. The median average income reported by debtors was $2,741 a month, and the median average monthly expenses were $2,645. 
  4. A total of 742,323 consumer bankruptcy petitions were filed in 2017, 1 percent fewer than in 2016.
  5. About 61 percent of the bankruptcy petitions were filed under Chapter 7 of the Bankruptcy Code, in which a debtor’s assets are liquidated and proceeds are distributed to creditors, except for exempt assets.
  6. About 38 percent were filed under Chapter 13 of the Bankruptcy Code, in which debtors make installment payments to a Trustee who distributes it to creditors under court-approved plan.
  7. Debtors were able to successfully pay their debts in 48 percent of the Chapter 13 cases closed in 2017 – slightly less than the 52 percent reported in 2016.

Less than 1 percent of petitions by individuals with consumer debts were filed under Chapter 11, which allows businesses and individuals to continue operating while they make plans to reorganize and repay creditors.

The data for the report is provided by the debtors either at the time they file bankruptcy petitions or within two weeks of filing, which is required by federal bankruptcy rules.