Nondischargeable debt is a type of debt that cannot be eliminated through a bankruptcy proceeding. Such debts include, but are not limited to, student loans; most federal, state, and local taxes; money borrowed on a credit card to pay those taxes; and child support and alimony.
What types of debts are dischargeable?
Dischargeable Debts
- Dischargeable debt is debt that can be eliminated after a person files for bankruptcy.
- Some common dischargeable debts include credit card debt and medical bills.
- In Chapter 7 cases, a discharge is only available to individuals but not to corporations or partnerships.
Does putting your home in a trust protect it from creditors?
Generally, trusts in California can help shield assets only from future creditors of third party beneficiaries for whose benefit the trusts are created. California limits a person’s ability to create a trust for his own benefit and shield those assets from creditors.
Can a creditor sue an inheritance under a will?
Whether you receive an inheritance under a will or trust, the issue is if the creditor is aware of your inheritance. When a creditor sues in court to collect the debt you must disclose all your assets.
Can a debt collector come after your inheritance?
However, your creditors can sue in court to collect the debt and if they win the case, the court can grant a judgment for the amount owed. With a judgment,the creditor can petition the court for wage garnishment or bank account levy orders or to place a lien on real property owned by you.
Do you have to tell creditors about inheritance?
Whether you receive an inheritance under a will or trust, the issue is if the creditor is aware of your inheritance. When a creditor sues in court to collect the debt you must disclose all your assets. However, once the process is finalized and a certain amount of time has passed, you no longer have a duty to inform the creditors of new assets.
How long does a creditor have to present a claim for an inheritance?
A creditor has a right to be paid from the proceeds of the estate, but he has only a certain amount of time, usually less than one year, to present his claim. This time limit is important for the timing of inheritances.
