3 Types of Debts That Can't Be Discharged Through Bankruptcy

Law Blog

The average credit-card debt of Americans who carry a balance is about $16,000. The total outstanding debt of American consumers is $3.4 trillion. Of course, there are many other types of debt as well, such as loans and medical bills. If you feel like you're drowning in debt, you're not alone. In 2011, more than 1.5 million people filed for bankruptcy. The number decreased through 2015, but there were still nearly 900,000 filings. If you're considering filing for bankruptcy, then it's possibly that this will be a great way to wipe out your debt or make it easier to manage. However, before you decide to go for it, you need to know which types of debt cannot be discharged through bankruptcy.

Child Support

Once you file for bankruptcy, your creditors are no longer allowed to collect from you. Of course, if you have debts that need to be paid to keep what you have, such as your mortgage and car payments, it's important to keep making payments. However, your creditors cannot ask you for the money. One type of debt that you cannot get away without paying is your child-support obligations. If you have past child support payments you haven't paid, these debts will not go away if you file for bankruptcy. You can't stop paying while filing for bankruptcy either.

Income Tax Debt

It's not impossible to discharge income tax debt. However, it's not easy to do this either. If you want to try to discharge income tax debt, you need to make sure you specifically tell your bankruptcy lawyer this so they can see if you meet the requirements. Tax debt is only eligible for discharge if it is three or more years old. It also had to be filed on time or filed more than two years before you filed for bankruptcy. Therefore, you can't file old returns right before filing for bankruptcy to try and discharge your tax debt. For your taxes to be dischargeable, they had to have been accessed by the tax authority at least 240 days before you filed for bankruptcy. You also can't have a conviction for tax evasion. If you are married, and you filed jointly, your spouse can't have a tax-evasion conviction either. Generally, for taxes to be dischargeable, they must be based on income. Of course, even if these requirements are met, there are many other factors that the court will look at, and the court still has to approve the discharge.

Student Loans

Certain hardships and disabilities can allow you to possibly receive student-loan forgiveness; however, you can't wipe out your student loans by filing for bankruptcy. If you have student loans, it's important that you are paying them on time when you file so your non-payments don't ruin your credit once your bankruptcy clears.

Filing for bankruptcy is a great way to wipe out overwhelming debt. However, you might not be able to remove everything. Make sure your bankruptcy attorney knows about all your debts so you can fully understand what your bankruptcy will do for you. Talk to a professional such as Velde Moore Limited for more information.


6 October 2016

injured at work? what do you do now?

Were you injured at work and fighting to get the workers compensation that you have paid into each year? Sometimes, getting those payments can be very difficult. What do you do when an employer fights the claim? Do you need a lawyer to help you through the process? How will you pay for a lawyer if you cannot even pay your electric bill? You are probably as lost as I was when I went through the process. Fortunately, you can learn from my experience with the system and find the answers to many of the questions that you have about filing a workers comp claim and fighting the system when it is denied.