Can All Debts be Eliminated in a Utah Chapter 7 Bankruptcy

The primary goal of a West Jordan Chapter 7 Bankruptcy is that after discharge, you will be debt free, back on your feet, and receiving a fresh start to financial freedom.  However, there are some debts that are generally not discharged in a Utah Chapter 7 Bankruptcy.

• Secured debts. If you have a debt that is secured by an asset like or a house, car, or furniture, then the general rule is that if you keep the property then you keep the debt secured by the property.  If you surrender the property in a Utah Chapter 7 bankruptcy, you can also discharge the debt.
• Income taxes. Income tax can be dischargeable in a Utah Chapter 7 Bankruptcy, but there are limitations.  Generally, in order to be dischargeable, (1) the tax is income based; (2) the taxes are more than three years old since the due date; (3) the tax returns were filed timely;(4) there was no fraud and/or attempt to evade the tax; and (5) the taxes were not assessed within the last 240 days.  If all the above conditions are met, you may be able to discharge your tax debt in a West Jordan Chapter 7 Bankruptcy.
• Student loan debt. This kind of debt, if it was made or guaranteed by a governmental agency or a nonprofit institution, is not dischargeable unless you can show “undue hardship”. To show an undue hardship you must establish that (1) based upon current income and expenses that you cannot afford a minimal standard of living; (2) that your current financial condition is unlikely to improve; (3) and that you have made a good faith effort to repay the student loans.  It is not easy to discharge student loans in a Utah Chapter 7 Bankruptcy.  If you are unable to discharge your student loans in a Utah Chapter 7 Bankruptcy, you still have options in a Utah Chapter 13 Bankruptcy.
• Alimony and Child Support. This kind of debt cannot be discharged under any circumstance. Also, if a debt has been incurred in the course of a divorce, even if it is not alimony or child support, it is not dischargeable.

The laws surrounding the dischargeability of a debt can be complicated and fact specific.

Please call me today at (801) 432-8682 to discuss your specific situation and how Bankruptcy may be right for you.