Limits of Chapter 11 Bankruptcy

Like all types of bankruptcy, Chapter 11 is not capable of canceling all of the debts that a company may incur that do not become part of the repayment plan. Bankruptcy does not fix all problems. For more information on filing bankruptcy, contact Tacoma, Seattle, Kirkland, Bellevue, Bremerton, Everett bankruptcy attorney Ryan Nykamp

Non-Dischargeable Debts

Under Chapter 11 Bankruptcy, debts for alimony and child support cannot terminated. Also, taxes owed to the government will not be discharged. These are not voluntary debts like they are obligations to other people. Educational benefit over payments or loans that were created or guaranteed by a governmental unit will not be discharged either. They must be paid back in full. The same applies to debts that are due for willful and malicious injury by the debtor to another entity or to the property of another entity. If the business has debts as a result to the death or injury of another caused by the debtor’s operation of a motor vehicle while intoxicated, these debts must be paid as well. The debtor is responsible for this type of debt to the extent that it is not paid in the Chapter 11 case.

Dischargeable Debts

While some debts cannot discharged, certain debts can be canceled when not included in the repayment plan if the creditor doesn’t actually ask for the debts not to be discharged. This comprises of debts for money or property that were obtained under false pretenses and debts for fraud or defalcation while acting in a fiduciary capacity. Also, debts that were taken on due to a willful or malicious injury by the debtor to another entity or to the property of another entity or to the property of another are included in this group.

Contact a Tacoma, Seattle, Bellevue, Bremerton, Everett Lawyer

If your company has difficulties paying all of the bills every month, contact Tacoma, Seattle, Kirkland, Bellevue, Bremerton, Everett Chapter 11 bankruptcy attorney Ryan Nykamp today at 425-289-9873 to learn how bankruptcy can benefit you.