Bankruptcy in Texas, Part 3
Continued from Bankruptcy in Texas, Part 2
Some debt can not be discharged
Some debt simply can not be discharged, regardless of the chapter of the code under which the petition is filed. That being said, Chapter 13 is less restrictive than other chapters available to individuals. The good news is the debt does not have to be addressed until after the discharge; however, this happens quickly in a Chapter 7 case, comparatively speaking--within a few months after the original petition is filed. Compared to Chapter 13, often referred to as the "wage earner's plan," the few months' wait fairly flies by--Chapter 13 cases are set up on either a three-year or five-year schedule.
According to the U.S Court's Web site: [Note: format edited, introduced bulleted list]
There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523(a) applies. The most common types of nondischargeable debts are
- certain types of tax claims,
- debts not set forth by the debtor on the lists and schedules the debtor must file with the court,
- debts for spousal or child support or alimony [basically, payments ordered in divorce decree],
- debts for willful and malicious injuries to person or property,
- debts to governmental units for fines and penalties,
- debts for most government funded or guaranteed educational loans or benefit overpayments [student loans, essentially, and a clause does obtain for undue hardship that could result in discharge, but it's hard to qualify],
- debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated,
- debts owed to certain tax-advantaged retirement plans, and
- debts for certain condominium or cooperative housing fees.
If you're willing to wade through the legalese of the actual bankruptcy code, try your hand; Section 523 can be found here. If you're thinking of filing pro se (without an attorney), doing so is a useful exercise: if the language all makes sense to you and seems exceedingly clear, then you might be a candidate for a pro se filing; on the other hand, if you find the language confusing or overly specific, it's almost assuredly not a good idea to strike out on your own. Know this: although it's true some legal code can be read as "standard English," certain terms and phrases have specific legal meanings. Unfortunately, federal bankruptcy courts do not operate like the much more informal small-claims courts or even the JP courts that hear cases such as evictions. If you appear in bankruptcy court, you are expected to perform to the same exacting standards as an attorney is held.
Continued in Bankruptcy in Texas, Part 4, in which we end the series and compare the advantages of Ch. 7 vs. Ch. 13, discuss the 341 meeting, and outline specific pitfalls and things to avoid.
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