Question

After graduating from college, you work briefly as a salesperson before filing for bankruptcy. As part of your petition, you reveal that your only debts are student loans, taxes from the last year, a $742 Visa credit card bill, and a claim against you based on your misuse of customers’ funds during your employment. Are these debts dischargeable in bankruptcy? Explain your answer

Answer 1

A person can file for bankruptcy when they want to obtain a discharge of debts under Chapter 7 or Chapter 13 of bankruptcy where they are not personally liable to repay such debts.

In this case salesperson is been filing for bankruptcy for student loans, taxes from the last year, a $742 Visa credit card bill, and a claim based on misuse of customers’ funds during employment, these debts cannot be discharged due to following reasons :

a. The debts that involves any alimony, child support, student loan, some types of taxes, fines for government agencies or in the criminal restitution, housing fee debts, personal injury debts, credit card debts worth more than $650 etc as such debts comes under the non dischargeable categories under bankruptcy.

b. In such cases the court can deny the discharge when debtor does not follow or lacks the compliance with the existing rules and process and the court has right of final say in the bankruptcy cases.