Florida Bankruptcy Guide - Part 2 - Discharging Debt

In any Florida bankruptcy, the endgame is a discharging of your debt. A discharge of debt only occurs when a judge signs a court order that proclaims you are free of the obligation to pay the dischargeable debt. Additionally, a discharge of debt frees the Florida debtor from creditors attempting to collect the discharged debt since it is no longer personally enforceable against you.

To discharge a debt, the following criteria must be met as a general rule:

  • The debt must be dischargeable
  • The dischargeable debt must be scheduled in a petition (exceptions exist in no-asset bankruptcy cases)
  • The dischargeable debt must not be subjected to either a waiver of discharge or an order denying the debt’s discharge
  • The dischargeable debt must not be reaffirmed by the debtor

Non-Dischargeable Debts

As mentioned in the previous criteria, discharging debt requires the debt itself to be dischargeable from a legal standpoint. Some debts, however, are not dischargeable. In some instances, the bankruptcy Chapter you filed will determine whether a debt is dischargeable or not. For example, property settlements in a divorce are not dischargeable under a Chapter 7 filing, while a Chapter 13 filing allows for the discharge of this form of debt.

Other examples of common non-dischargeable debt for both Chapter 7 and Chapter 13 bankruptcy include:

  • Student Loans
  • The majority of taxes, government fines and penalties (some very old taxes may be able to be discharged)
  • Personal injuries caused by driving while drunk
  • Child support and spousal support
  • Debts stemming from illegal acts such as fraud, embezzlement and/or larceny
  • Court fines
  • Debts that are not listed on bankruptcy papers
  • Debts incurred after filing a bankruptcy case

While this list is not exhaustive, expect debts of this nature to be viewed as non-dischargeable. However, there are plenty of secured debts that may be discharged in a Florida bankruptcy as well.

Discharging Secured Debts

In bankruptcy, a secured debt is one which is backed by collateral. In other words, it can be repossessed by a lender if the debtor defaults on their loan. As such, mortgages and car loans are common forms of secure debts, but there are other forms of secured debt as well.

Judgment liens, credit card debt, medical bills, dental bills and personal loans may be discharged in bankruptcy. However, if you did not reaffirm your secured debt in a Chapter 7 bankruptcy or did not make payment provisions in a Chapter 13 filing, a secured creditor can still repossess the collateral.

Discharging the debt will simply eliminate your personal liability for the debt, but the creditor will likely still try to repossess a car or foreclose on a debtor’s home in such a scenario. When navigating the complexities of these scenarios, a Florida bankruptcy attorney will help ensure you make the best financial decision for the specifics of your case.

John F. Greene is a Destin bankruptcy attorney whose office is conveniently located in Destin. From his Destin office, John helps bankruptcy clients throughout the Emerald Coast and Northwest Florida, including Okaloosa, Walton, Santa Rosa and Bay Counties. He also represents the communities of Destin, Fort Walton Beach, Niceville, Santa Rosa Beach and Panama City.

Contact John F. Greene or call 850-424-6833 to put a trusted Florida bankruptcy attorney to work on your case.

To learn more about bankruptcy, review all four parts to this guide:


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