Which Debts Are Unable to Be Discharged by Bankruptcy?
Bankruptcy isn’t a cure all for absolutely everything. While it can provide immense financial relief and support, and in many ways, offer you a fresh start to move ahead into the future, it’s not simply as easy as snapping your fingers and saying goodbye to every single issue you’re encountering. It’s crucial to understand what bankruptcy can’t do, and the types of debt that bankruptcy does not discharge, so you’re under no illusions about its effectiveness and capabilities.
At the top of the list for types of debt bankruptcy doesn’t discharge or eliminate is child support and alimony. These are viewed as entirely separate obligations, and are essentially untouchable through the process of bankruptcy. When financial circumstances have drastically changed, new child support and/or alimony agreements may be able to be arranged through the family law courts, however, not with any aspect of the bankruptcy process itself.
One of the most powerful aspects of bankruptcy is the ability to discharge taxes. Not all taxes are dischargeable, however. You will need to rely on the advice of experienced bankruptcy attorneys to find out if your taxes are eligible to be discharged.
Bankruptcy also does not generally enable to you to eliminate student loans. There may be exceptions to this depending on your circumstances, but in most cases, student loans will remain in place. As the amount of student loan debt continues to increase nationally, there is increasing speculation about addressing the issue of whether or not student loans should be dischargeable, at least under certain circumstances. Despite not being eligible to be discharged, different types of bankruptcy, such as Chapter 13, may offer considerable relief from student loans while resolving other debts.
Clearly, there’s a great deal to consider, and many different factors in play. Call Goren & Tucci at 301.977.4300 for more information and we’ll be happy to provide you with a free consultation.