Criminal penalties, restitution, and attorney fees are not dischargeable.
Video Transcribed: So this is opposed to your basic run of the mill unsecured debts, credit cards, medical bills and secure debts, car loans, homes. So in this final episode, I’m just going to run through a few different debts that are treated in a special way in bankruptcy. We’ve already talked about student loans, generally not dischargeable. Well, I should say always not dischargeable if they are federal student loans. We’ve talked about child support, not dischargeable. And we have talked about taxes, dischargeable if they were filed on time and have been uncollected for at least three years. And we talked about 401k loans stuck with those too, although the 401k remaining balance is exempt generally.
So last, let me run through a few more for you. Take a look at my list. And we can basically classify all these as consequential debts, meaning you got in trouble in some way. So criminal penalties, restitution. Let’s say you committed some criminal offense and were given fines and costs and some sort of restitution to a victim. None of that is going to be dischargeable.
In addition, if you have a drunk-driving accident and it comes over into civil. Normally, in a chapter seven bankruptcy, your personal injury benefits are exempt up to 50,000 and you can discharge your liability for… Even with wrongdoing, if you were found to be in the wrong in a car accident. Now, if you get a criminal penalty, again, that’s not dischargeable.
But let’s say you get in a car accident, didn’t have insurance, insurance didn’t cover it, you owe 20,000 in medical and pain and suffering or whatever it is to the other party, can discharge that normally or you can treat it as any other unsecured debt in a chapter 13.
However, if you were in a drunk-driving accident, you cannot discharge any of that liability. You will be responsible for whatever judgment is granted against you if you were drunk-driving.
Let me say one thing about the criminal penalties. It can be a little confusing but there are certain criminal-related penalties you may be able to discharge and those would be civil penalties. Classic example being you didn’t keep your yard clean and your city or town or village has cleaned the mess up for you and then charged you for that. That is something that you can discharge in a bankruptcy.
So if you have any questions about a specific, email me, but I think you can probably understand the difference. In that latter scenario, you did not violate any criminal laws. It’s purely a civil charge for work done by the city. That, unsecured debt, just like anything else.
Attorney fees generally dischargeable except there is an exception for child custody matters. So if you owe an attorney fee to an attorney who helped you in a child custody case that is not going to be dischargeable. And let’s see what have I left off.. That’s pretty much going to cover it. So I think we’ve covered most of the debts that are not going to be dischargeable.
If I have left something out or there’s anything you have a question about, as always, call me at one 188-debtline. Or, email me directly, email@example.com.