Not all Debt is Dischargeable through Bankruptcy

Many people who choose to file for Utah bankruptcy believe that when they complete the process, all of their debt will be eliminated.  However, only unsecured debt is discharged after people have successfully filed for Chapter 7. 

Unsecured debt does NOT include:

§  child support payments

§  alimony payments

§  settlements or judgments

§  student loans

§  tax debt

Most people wonder why student loans are exempt from discharge.  In June 2007, U.S. Senator Dick Durbin introduced a new Bill that would make private student loans dischargeable under bankruptcy as these loans were in 2005.  Back in 2005, changes to the U.S. Bankruptcy Code made private student loans equivalent to the treatment of government-guaranteed loans, which are not dischargeable.  The Bill would reverse the 2005 amendment and allow for the discharge of any student loans that are considered private.

Have questions about Utah bankruptcy?  If so, contact us to discuss your concerns with a Salt Lake City bankruptcy lawyer.