Non-dischargeable Debts
Waukegan Illinois Bankruptcy Lawyers & Attorneys
David Siegel: Yes, what type of debts cannot be eliminated in a Chapter 7 bankruptcy?
Jesse Barrientes: Student loans, taxes – and I’ve had recently a few of these so it’s important. Toll way fines, because sometimes people go through and don’t pay it and then they double and everything else. Those are not going to be able to be eliminated in those things.
David Siegel: So toll way fines have to be paid back in full or they’re just not eliminated?
Jesse Barrientes: Oh, they’re just not eliminated in Chapter 7. And sometimes I’ve had people come in with substantial amounts on the toll way. Domestic support obligation, which is child support or maintenance, are not dischargeable in bankruptcy. So if you’re in arrears or somebody is behind in child support, whatever amount, that’s not going to discharged whatsoever.
David Siegel: Well, that would make sense because the courts and the country want to look out for children and make sure they’re supported so whenever there’s a child support obligation, that debt has to be pain in full at some point. It can never be eliminated.
Jesse Barrientes: Right. As it should be. Child support, when you look at that, the support is for the child. You have an obligation. We’ve talked about this in other shows. A parent has an obligation to take care of his child and so it makes sense and it’s great that those are not discharged because I really tell you, if it were discharged I think there’d be a whole another nitch or area of bankruptcy law where people would just be coming in to discharge those obligations.
David Siegel: What about attorney fees? Can attorney fees be eliminated in a Chapter 7 bankruptcy case?
Jesse Barrientes: For me? To tell you sadly yes, they can.
David Siegel: What do you mean by that? [Laughter]
Jesse Barrientes: Well, it’s sad. And actually just recently I had one – you know, live by the sword, die by the sword, Dave. I had one recently discharged. It wasn’t like it was unexpected, probably in excess of $20 thousand, but again that’s the system that’s been put into place. Attorney fees for your own attorney can be discharged. Attorney fees, however, that you’re ordered to pay or to contribute to the other side in the form of support to that other person, cannot be discharged. Nor I believe can fees for the GAL, guardian ad litem. We’ll probably talk about that on one of our shows. We talk about those types – guardian ad litems and attorney for the child. So those cannot be – or they’re simply not discharged and they’re collectable.
David Siegel: Is this why in a typical Chapter 7 bankruptcy case in Waukegan, the attorney fees that the client pays you have to be paid in full before you file the case? Is that the reason?
Jesse Barrientes: If you do that, and this is what I tell people, I say everything has to be paid in full before we file it because then the firm is going to be a creditor and if it gets filed then that’s subject to discharge. Because the debt actually was really incurred pre-petition.
David Siegel: So this is why attorneys want to get paid before they file the case, otherwise their debt is typically eliminated.
Jesse Barrientes: That’s correct.
David Siegel: Absent some kind of agreement to the contrary.
Jesse Barrientes: Right. Or a reaffirmation agreement which probably isn’t going to happen.
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