When going through a financial crisis, sometimes the best and only option if filing for bankruptcy.
For example, if you have a lot of debts and you see no way out because of one reason or the other, then filing for bankruptcy is the best option to get out of the situation. It is also good to have a good bankruptcy attorney to help you with the process.
Most people understand Bankruptcy as stipulated under chapter 7 of the bankruptcy law – also known as straight bankruptcy.
However, it is important to note that there are certain types of debts that can’t be cannot be easily discharged in chapter 7.
They include the following:
1. Back taxes and customs
This in includes income tax, social security taxes and owed penalties or unpaid withholding tax – if you are an employer. Despite the fact that most back taxes may not be discharged, they can still be discharged if the return due was three or more years ago.
2. Student loans
It is impossible to get your student loan debt discharged by filing for bankruptcy – at least not for a few years after graduating.
Nonetheless, it upon the court’s discretion to decide whether to discharge the load debt if it determines that the debt is causing you undue hardship – but you have to prove that you aren’t able to pay the loan now or in future. That means you need to hire a good bankruptcy lawyer.
3. Child support and alimony
Child support and alimony cannot be discharged under the bankruptcy law. You have to provide support for the child as directed by the court even after you are declared bankrupt.
4. Home mortgage and other property liens
Chapter seven of the bankruptcy law doesn’t allow individuals to be discharged from mortgage loans. However, you can still keep your home even after filing for bankruptcy – as long as you keep making payments.
5. Debts that don’t belong to you
Strange as it may seem – people have often filed for bankruptcy only to realize that the debt belonged to their ex-partner. It is, therefore, good to verify that the debt is yours before moving ahead with the bankruptcy application.
6. New credit card debt
Do not go on a spending spree using a new credit card with the hope that the debt will be written off after filing for bankruptcy. It will be near impossible for the court to discharge debts accrued just a few weeks after you filed for bankruptcy.
7. Debts from fraud, Larceny or embezzlement
Debts associated with deaths as a result of careless driving or from fraudulent activities cannot be easily discharged by the court.
8. Car loan if you insist on keeping the car
The new bankruptcy code allows an individual to “reaffirm” their car loan if at the time of filing for bankruptcy they are still repaying the loan. Remember your car loan is secured by the car.
If you have reached a point where you think that bankruptcy is the only option, then it is highly recommended that you look for a qualified and experienced bankruptcy lawyer to help you through the process.