According to Statista, in 2022, the state of Georgia led the nation in Chapter 13 bankruptcy filings, with a total of 14,603 cases initiated.
When confronted with financial challenges, bankruptcy can offer you a fresh start from the burden of debt. However, you may be unable to discharge all of your bills through this process. Before filing for bankruptcy, it is important to understand which debts you cannot eliminate since the legal system classifies them as non-dischargeable.
1. Student loans
Student loans are difficult to discharge and require you to demonstrate “undue hardship”. This means you must prove that repaying the loans would prevent you from maintaining a minimal standard of living.
2. Child support and alimony
In Georgia, court-ordered child support and alimony payments are non-negotiable. The courts prioritize the welfare of dependents, so you must meet these obligations even if you are facing bankruptcy.
3. Income tax debt
Debts owed to the IRS and state tax authorities are not automatically discharged. While there are exceptions and options for negotiating tax debts, bankruptcy is not a straightforward solution.
4. Personal injury claims
If you have caused injury to another person through your deliberate actions, any resulting debts, such as judgments from a personal injury lawsuit, typically remain non-dischargeable. As a result, you must be ready to meet these obligations even if you decide to file for bankruptcy.
5. Government fines and penalties
Individuals cannot discharge traffic tickets, court-imposed fines or other debts resulting from government fines and penalties. You must address these obligations separately and pay them as required by law.
When considering bankruptcy, understanding non-dischargeable debt can help you decide the best way to handle your financial situation.