Dischargeable Debt

Dischargeable debt.  What does that mean?  Debt needs no definition.  But dischargeable does.  Dischargeable debt is debt that can be discharged by law.  This means that the debt is eliminated.  Normally this is done though the filing of bankruptcy.  And once discharged, the debt can no longer be collected upon.

The reason people file bankruptcy is that they cannot afford to repay their debts.  Filing bankruptcy allows their debts to be discharged.  When a bankruptcy case is completed, a discharge is ordered.  This means he bankruptcy judge issue an order.  The order declares the debt is legally discharged.  This means it is no longer owed.  But only dischargeable debt can be eliminated.  Or discharged.

Most forms of debt are dischargeable.  But some are not.  The most common forms of debt that are dischargeable include credit card debt, medical bills, car repossessions (or surrenders), foreclosures, past-due rent, social security and unemployment overpayment, and more.  These are all types of dischargeable debt.  They can all be eliminated through the filing of bankruptcy.

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Some debts, though, are not dischargeable.  Certain types of taxes are not dischargeable.  For example, sales tax and employee withholding are types of debt that may not be dischargeable.  So even if you file bankruptcy, you may not be able to eliminate these debts.  There are forms of bankruptcy, Chapter 13 bankruptcy for example, where you can provide repayment plans for these debts.  But none that eliminate them.

Income tax and student loans may be dischargeable debt.  Stress on the may.  Income tax can be discharged through bankruptcy.  But the taxes must be old enough.  There are other restrictions, too.  But typically income taxes more than 3 years old can be discharged in bankruptcy.  Student loans are another maybe.  Typically student loans are not discharge
able.  Even if you file for bankruptcy.  But is you are in a hardship situation, as this  US News Report & World Report article points out, you might be able to eliminate your student loans.

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