There are a number of debts that cannot be discharged when you file for bankruptcy. These debts need to be discussed with an Iowa bankruptcy lawyer.
While filing bankruptcy under Chapter 7 will give you a fresh start on your financial life, there are some debts that you cannot discharge. Some of those non-dischargeable debts include, but may not be limited to:
- Taxes owed the IRS
- Student loans
- Back child support
- Car loans (unless you surrender the car to the creditor)
- Mortgages (unless you surrender the home to the creditor)
- Fines/penalties owing to government agencies
- Debts incurred as a result of larceny or embezzlement
- Debts not reported in the bankruptcy filing
- Recent purchases of non-essential items
- Debts owed for luxury goods/services charged within 90 days of seeking bankruptcy protection
If you have chosen to file a Chapter 7 bankruptcy, you may not be allowed to keep all your assets. However, most of the exemptions allowed under federal and state law happen to be large enough to cover most of your standard items of personal property. If the value of an item of personal property in question, such as a car, is higher than the allowed state exemption, then you (the debtor) may need to sell it or “buy it back from the bankruptcy estate/trustee” in order to pay down your debt. These are things that need to be discussed with an Iowa bankruptcy lawyer.
Property taxes may not be discharged by bankruptcy. However, there are some federal taxes that may be, provided they meet certain specific conditions. For example: federal income tax may be discharged provided that the return was due to be filed more than three (3) years prior to your bankruptcy, and provided that you filed the return more than two (2) years prior to the bankruptcy, and provided that the tax was assessed at least 240 days prior to the bankruptcy, and provided that you did not avoid paying your taxes or file a fraudulent return. This is a complex area, and to completely understand it, it is best to consult with an Iowa bankruptcy lawyer.
It should also be noted that if you have any debts or fines owing that accrued because of illegal behavior, you will still be responsible for them when you declare bankruptcy. For example, if you were charged with driving under the influence, if you have a collection of traffic tickets or have court ordered restitution to pay etc.