Debt discharge or release can be regarded as one of the major benefits of chapter 7 bankruptcy San Antonio. However, it can be so that the debt discharge might be limited, or one might not get any discharge. Why does this happen, how to avoid this? All these questions will be addressed below. Meanwhile, address all other worries or questions about bankruptcy and their chapters on https://bankruptcy.recoverylawgroup.com/.
Legal reasons for not qualifying for a discharge
The two common legal barriers for not qualifying for a debt release can be listed as follows-
- Error in procedure
The bankruptcy court is a legal framework and it has a pre-defined methodology of getting things done. For instance, filing of the form, passing of motion for different scenarios and presenting the case in front of the court has a set procedure and experienced attorneys can best handle the documentation and presentation part. A small error in this process could create a legal barrier for availing debt discharge.
- It is a non-dischargeable debt
There are some debts which have been categorized under non-dischargeable. There are almost 19 types of debts which cannot be discharged. If your debt falls under this category, it is very unlikely to get a discharge. However, under certain circumstances, with a good attorney, you may be able to get some relief for these 19 categorized debts also.
Debts that are normally non-dischargeable
Under most scenarios, there is some type of debts which are not subject to discharge most often than not. The list below consists of some common non-dischargeable debts-
- Any unscheduled debt, which the debtor fails to list in the bankruptcy petition and for which creditor does not receive a notice because of not being on the mailing list, shall not be discharged
- Tax Debts
- Child support and alimony
- Fines, penalties and other directive fees to government agencies
- Student loans
- Drink and drive debts
- Debts from tax benefited retirement plans
- Debts arising from Condo or HOA fees
- Attorney fees
- Criminal restitution
On what basis can the Court deny a qualifying release of debt?
The basis for court denial for release of debt can make you more complaint and vary about the process and you can avoid such scenarios. Few of them can be listed as follows-
- Not facilitating requested tax documents
- Did not complete financial counseling course, which is a mandatory requirement for filing a bankruptcy court
- Any transfer or nondisclosure of a property or an asset to manipulate the court and the creditors
- Tampering with the book records, agreements and any other records of value
- Any fraudulent act in relevance to the bankruptcy case
- No or incomplete records for lost/sold/disposed assets
- Violation of court order during the bankruptcy process
- Have received a bankruptcy discharge in the recent years
Debts that can be subject to a strong release objection
These are debts that can create controversy amongst the lenders and can lead to strong objection if the filer appeals for release of such a debt. Such debts have a 50-50 chance of being released. They can be listed as follows-
- Use of credit card for the purchase of luxury goods – In 99.9% cases, such a debt is a non-dischargeable debt and every credit card lender will surely object release or discharge of such a debt
- Cash advances – If a bankruptcy filer has received any cash advance from a lender within 70 days of the bankruptcy filing, especially above $1,000, it can be regarded as a fraudulent transaction. Hence, the cash advance could be a non-dischargeable debt.
- Any debt that is obtained by providing for incorrect or false documentation
- Any debt that has been incurred due to willful damage to other’s property of causing injury to someone else is also subject to a non-discharge.
It is still not something which straightforward to interpret as there are a lot of ifs and buts when it comes to the type of debts that can be wiped out versus debt that shall prevail even after bankruptcy. Dial in 888-297-6203 for more information and get all your questions answered from the subject matter experts.