3. Which Debts Can and Can't be Eliminated in Chapter 7?
Well, it is easier to list the debts that can't be eliminated because the list of debts that can be eliminated is quite long. The debts that can never be eliminated in Chapter 7 are: trust fund taxes, debts obtained through fraud, debts for injury due to willful and malicious injury, debts due to injury in auto accidents where debtor was intoxicated, court-ordered spousal and child support payments owing, fines or penalty payable to a government unit, restitution ordered by a court, debts resulting from loans to pay non-dischargeable taxes. You will probably notice that I did not list student loans and other taxes on the list. The reason is that these debts might be eliminated in Chapter 7 Bankruptcy if the rules are met. If you are looking to eliminate your student loans, don't get your hopes up. The most difficult debt to eliminate is a student loan. You will have to prove to the court that you are unable to work or earn enough to pay off the loan. This is a very high burden of proof and is rarely met. Taxes are another debt that was not listed above. This is because some taxes can be eliminated in Chapter 7 Bankruptcy. For a more detailed discussion of taxes, click here.