Bankruptcy can offer much-needed relief to individuals who are overwhelmed with debt. If you are struggling to keep up with your bills, declaring bankruptcy could be an excellent opportunity to reset your finances and have a fresh start.
However, it is important to understand that bankruptcy will automatically not wipe away all your debts. Certain debts will remain even after declaring bankruptcy. Here are some of these debts:
Alimony and child support debts
Both alimony and child support payments (collectively known as domestic support payments) are statutory obligations, meaning that they are imposed by the law. You cannot walk away from these obligations by declaring bankruptcy. If you are fallen behind on alimony or child support payments, it is important that you consider petitioning the court for the modification of future payments. During the modification trial, the court may be open to reviewing and recommending a payment plan for pending payments.
Student loan debts
Student loans are generally non-dischargeable debts. However, there are rare occasions when you use bankruptcy to discharge all or part of your student loans. For this to happen, there has to be proof that paying back your student loan will leave you adversely impacted to the point that you will not be able to meet your basic needs. Additionally, you will need to prove that your current financial situation is unlikely to improve any time soon.
Other non-dischargeable debts include:
- Government debts like fines and penalties
- 401 loans
- Debts that arise from fraud and other criminal acts like DUI accidents
- Debts that were deliberately omitted from the bankruptcy forms
Bankruptcy can offer you a new lease of life when you are choking in debt. Find out how you can use bankruptcy to get back on your feet, financially speaking.