A misconception exists around many of those in Salem who choose to seek bankruptcy protection. Many seem to believe that bankruptcy filers are limited to those few people who simply cannot manage their money well. However, statistics seem to refute that assumption. The website USCourts.gov reports that an average 1.21 million personal and business bankruptcy cases were filed every year from 2011-2015. Of that number, an average of 835,794 were Chapter 7 filings.

While there are many reasons why a Chapter 7 bankruptcy may be the most advantageous for one’s individual situation, the most common may be the potential to discharge a good portion of his or her current debt. However, there are a number of debts that do not qualify for discharge through bankruptcy. These can be found in Section 523 of the U.S. Bankruptcy Code. They include:

  •          Taxes: Income tax debts accrued following a period of 240 days prior to filing for bankruptcy, as well as those deemed to have priority tax status cannot discharged.  
  •          Domestic support: This incudes alimony and child support, as well as any liabilities assigned to one as part of a divorce decree.
  •          Debts incurred through fraud: Any debt meant to repay fraudulent activities against either private parties or public institutions are also not eligible for discharge.
  •          Fees: These refer to fees related to ongoing legal proceedings while one was incarcerated, or as part of a condo or homeowners association.

Any debts related to personal injury or wrongful death claims can also not be discharged, as are debts whose discharge would cause a financial hardship for the creditor. The hope is that getting a debtor out from under other dischargeable debts will free up funds to meet those liabilities that are not eligible.