The primary reasons most debtors file for Chapter 7 bankruptcy protection are to rid themselves of debts which hinder their ability to get back on their feet financially. But individuals considering whether to take such an avenue need to recognize that many types of debt – or certain claims they owe – are not permitted under law to be discharged. In other words, the following types of claims will not be deemed by a bankruptcy court to be legally extinguished by filing a bankruptcy claim:
- certain tax liabilities
- spousal or child support or alimony
- debts owed to a former spouse or child if they arose out of a divorce or separation
- fines and penalties owed to government agencies
- student loans (with a few exceptions)
- personal injury claims caused by the debtor’s operation of a motor vehicle while intoxicated
- debts owed to certain tax-advantaged retirement plans
- specific condominium or cooperative housing fees (such as homeowners association fees)
- attorney fees in child custody and support cases, and
- court fines and penalties, including criminal restitution
- those debts not listed on the debtor’s financial schedule which the court requires the debtor to file in the early stages of the Chapter 7 bankruptcy case (this refers to a group of debts not dischargeable as a result of a procedural defect as opposed to a debt which is non-dischargeable because of the intrinsic nature of the debt)
Before making a decision whether to proceed with a Chapter 7 bankruptcy action, it is advisable to consult with a bankruptcy attorney to discuss the nature of one’s debts. It is crucial to ensure that the kind of financial obligations one has are the type which a bankruptcy case can actually address. The law prohibits most of these debts from discharge for specific policy reasons.
In Albuquerque, Giddens & Gatton Law, P.C. has attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases in New Mexico. The firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.