Bankruptcy filing does help in eliminating
your debts but certain kinds of debts have to be repaid. In case most of your
debts are non-dischargeable,
then bankruptcy will not be an option to solve this
financial dilemma.

A non dischargeable debt can be eliminated only if the court
grants you an exception. The exception might be certain period of time transpiring
since the debt was due or because the creditor had not objected to the discharging
of the debt. Non-dischargeable debts can only be eliminated by an exception
otherwise have to be repaid according to bankruptcy code. These exceptions are:

Recent Student loans

Previously, bankruptcy courts have always treated these loans as unsecured
debts. bankruptcy Chapter 7 could get these loans fully
discharged. In 1976, congress came up with a reform in Higher Education Act
of 1965. This reform stated that for any student loan to be discharged it should
meet the following bankruptcy requirements;

• At the time of filing the bankruptcy, the debt must already be due more than five years. This rule was changed in 1990 and the time frame was increased to 7 years. In 1998 this rule was completely eliminated and now only the second point has to be proved true.
• If debtor is unable to pay the student loan, it will become an undue hardship for him.

Child Support and alimony

In bankruptcy these debts can be discharged on account of agreements that have not been court-ordered. In case one of the spouses agrees to have more than half of the marital debts in exchange of lower support payments then the debts of the spouse might not be discharged by the court in a bankruptcy filing.

Taxes

In bankruptcy taxes that include federal, state and local taxes are not dischargeable over a period of three years after you have filed your tax return. If you have your case being preceded in a tax court for three years, any tax that is assessed within 240 days of bankruptcy filing will still be non-dischargeable. If your property taxes are over one year late they are dischargeable if the lien against your property is not late.

Fines

Court and government agency fines, surcharges, penalties and restitution can be discharged in bankruptcy as a general rule. If debts have incurred as a result of any damage from driving while intoxicated, then they can also be discharged. Such debts must be established in court and a higher court has to issues the discharge orders. If traffic fines, municipal fines and other such small claims are there because of intoxicated driving then they are also dischargeable.

Debts not discharged in a previous bankruptcy

If there are debts that court didn't discharge in a previous bankruptcy, then the court will still not discharge them in the later one.

Debts not listed on your bankruptcy petition

In bankruptcy many people keep one or more of the credit lines with little or no balances out of the bankruptcy filing in order to keep some credit resources. Any such debt will not be discharged.