People who are drowning in debt can file for bankruptcy and get a fresh start either via liquidation (Chapter 7) or through reorganization (Chapter 13). Some debts could be discharged by the bankruptcy court for both circumstances. The creditor could no further take action against the debtor, like seeking to collect the debt or seizing any collateral, that once obligation has been dismissed. Nevertheless, not all debts could be dismissed, and some are extremely tough to discharge.
Debts never released in a Bankruptcy discharge
While the purpose of both Chapter 7 as well as Chapter 13 bankruptcy is to get rid of your debts therefore you could get on with the life, not that all debts are dischargeable.
- Child support as well as alimony.
- Tax liens, for example, are unpaid taxes. Certain state, federal, and municipal taxes, on the other hand, might well be dischargeable when they trace back several years.
- Debts incurred as a result of the intentional and malicious harm done to some other person or their property.
- Debts’ arising from the debtor’s operating a vehicle whilst inebriated or impaired by certain substances, resulting in personal injury or death.
- Debts that you didn't include in the bankruptcy petition.
You should continue to owe any condominium or corporate association fees, as well as any other obligations which were not discharged in a previous bankruptcy when you apply for Chapter 7. By reaffirming your auto loan and continue making payments, you may typically keep your car. Likewise, though if you owe money on the property, you could generally keep this if you filing bankruptcy as long as you maintain making payments but don't have more value as compared to state and federal bankruptcy regulations allow.
If you owe money on taxes or student loans, you could be capable of working out a repayment plan without declaring bankruptcy.
Tough to Discharge Debt obligations in a Bankruptcy
Student loans are extremely difficult to dismiss in bankruptcy; you could only do this if you could show that you or your dependents have suffered excessive hardship, including as unable to sustain a minimum standard of living.
A court may dismiss a portion of the student loan debt, however, not all of it, in some instances. If student loans are a big factor in your decision to file for bankruptcy, talk to the loan servicer initially to see if you can work out a repayment plan which works for you.
Income tax bills could be discharged without the need for a special exemption, which may only be acquired by filing a bankruptcy petition and stating why you are entitled to relief.
When it comes to federal taxes, the Internal Revenue Service (IRS) can provide options to persons that are unable to repay what they owe. Your IRS might still set up a payment plan, often known as an installment agreement, which allows you to pay your bills with time.
It's important to remember that your creditors may be able to prevent certain debts from becoming discharged. They can also seek the court to lift the automatic stay, which prohibits them from continuing their collection efforts. As a result, the discharge procedure does not always run as smoothly or swiftly as debtors would like.
Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.