Some More Debts That Can’t Be Discharged in Bankruptcy

In my last blog post, I discussed some debts that cannot be discharged in the Arizona Bankruptcy Court and I am about to go through some more. I need to whine a little bit because I hate this stuff, I wanna talk about what we can get rid of! But knowing what can’t be eliminated is pretty critical so here it goes.

When it comes to retirement loans, some of them enable you to take out a loan against your holdings, but, if you think about it, what you are really doing is taking a loan from yourself with interest of course and that is something you cannot discharge in bankruptcy. What about debts that were denied discharge in an earlier bankruptcy?

If debts were denied a discharge in an earlier bankruptcy, the debts included in that bankruptcy are not eligible for discharge in a new bankruptcy filing. This rule bars you from having a debt deemed non-dischargeable in one bankruptcy discharge then trying it again later. For example, if the state of Arizona succeeds in getting a judgment that the unemployment benefit debt was non-dischargeable in your last chapter 7, you aren’t going to be able to take another shot at having that debt deemed dischargeable in your new filing.

There are also some debts that are only non-dischargeable if the creditor takes action to have it declared so. Remember that creditors can always ask the Arizona Bankruptcy Court to determine whether some kinds of debts are actually dischargeable. For each of the following categories, a creditor must file a motion in court and, as long as you file a response, a hearing must be held to determine if the debt will be discharged. No motion means the debt is discharged.

The presumption is that credit card purchases totaling more than $600 in the 90 days before filing for “luxury” goods owed to a single creditor are non-dischargeable. The creditor must file a motion to have it declared so. If the creditor files a motion, you have the chance to show them that you intended to pay the creditor back(maybe you made some small payment afterward) or that what you purchased was really a necessity and not a luxury good. This rule holds true for cash advances totaling more than $900 taken out within 70 days of filing for bankruptcy. But, if you can make a showing that your intent was to pay the creditor, then the debt will be discharged.

The general rule in bankruptcy is that any debt obtained by fraud, or through the use of a false financial statement, cannot be discharged in any bankruptcy case. At the outset, fraud is normally defined as a misrepresentation that another person relies upon in determining whether to complete a transaction. A debt will be deemed fraudulent if the debtor did not intend to repay the debt, e.g., the debtor had already signed a fee agreement with an attorney to file bankruptcy prior to taking out credit or took out credit without remotely having the financial wherewithal to repay the debt.

Call Us for Help

If any of the debts discussed in this blog raises any issues for you, please make an appointment toes one of our attorneys at Phoenix Fresh Start Bankruptcy Attorneys. There are often strategies for making debts that are non-dischargeable today, dischargeable in the weeks and months to come…