There are some types of debt that cannot be avoided by filing for bankruptcy due to how the Minnesota and federal bankruptcy law works.

Some Tax Debt - IRS and Minnesota Department of Revenue

You cannot have some tax debt discharged by bankruptcy. For example, if you owe income taxes from the past three (3) years to the IRS or the Minnesota Department of Revenue, you will not be allowed in bankruptcy to discharge your tax debt. The purpose of this public policy is to avoid there being a tax loophole that would allow people to game the system and not pay taxes on the money they have earned and were supposed to pay taxes on in the first place. Since tax debts cannot be discharged, you should put it at the top or near the top of your list of debt to pay down.

Federal Student Loans

In most cases you cannot have federal student loans discharged in bankruptcy. Often students are poor and if the government allowed federal student loans to be discharged immediately after they complete their education, many students would turn to bankruptcy and never repay their student loans. Since education is seen as an investment for the government that will eventually be paid back, allowing federal student loans to be discharged in bankruptcy would be a bad investment move. However, most student loans are discharged when the student dies.

There is one rare exception that allows student loans to be discharged when there is an extreme circumstance. In order to have federal student loans discharged you have to be able to show that paying back the loan causes you and your dependents undue hardship. You need to be able to show that repaying the loan is not possible for you due to an extreme situation, such as a major physical disability. To find out if getting your student loans discharged is an option for you, contact a bankruptcy attorney familiar with the court opinions on discharging them in your state.

Some Families Support Obligations

Not all family support obligations can be discharged by bankruptcy. Usually you cannot have child support or alimony discharged if it was originally court ordered. Thus even after successful bankruptcy you will likely still be responsible for future support obligations.

Theft or Conversion of Property

You cannot use bankruptcy as a way of keeping property that you stole or wrongfully took. In bankruptcy you will have to return that property. This includes if you have taken or misused intellectual property, such as confidential information taken from a former employer. Bottom line is that you cannot file for bankruptcy in an effort to keep what you have stolen.

Other Debts Not Dischargeable in Bankruptcy

Besides the types of debt listed above there are some other types of debts that cannot be discharged in bankruptcy. These other exemptions are rare or complex. You should meet with a Minnesota bankruptcy attorney to discuss if any of your debts are not dischargable.

Are Your Debts Dischargeable in Bankruptcy?

Meet with a Minnesota bankruptcy attorney for a free consultation to determine if your debts can be discharged in bankruptcy. As part of the consultation with a Minnesota bankruptcy attorney your debts will be analyzed, your assets determined, and your recent transactions will be looked at to decide if bankruptcy or some other method is the best way to rid you of your financial debts.