Planning to use Chapter 13 bankruptcy to discharge your debts and get a fresh financial start? One of the advantages of Chapter 13 bankruptcy is that you will create a repayment plan to pay back creditors a portion of the debts you owe, which results in the bankruptcy not lasting on your credit report as long as a Chapter 7 bankruptcy. However, know that all your debts cannot be discharged. Here is a list of a few key debts that you will still be responsible for when using Chapter 13 bankruptcy.
Taxes
In general, you won't be able to discharge taxes using Chapter 13 bankruptcy. There are some exceptions to this rule, so you'll need to consult with a bankruptcy lawyer to learn if your taxes qualify. Each state's rules are different, so you will need to become familiar with how those rules apply to you. For example, you may not be able to discharge recent tax debt, but you may be able to discharge others that are older.
Alimony And Child Support
Do you owe your spouse money for child support or alimony? Those debts will not be discharged in Chapter 13 or Chapter 7 bankruptcy. That's why it's very important to stay on top of making these payments during bankruptcy. If you need to modify the alimony or child support agreements because of your financial hardship, you'll need to have a judge approve the modification so that you pay less.
Student Loans
Another debt that is not typically discharged is student loan debt. If you borrowed money for your college education you will not be able to use bankruptcy to get out of paying it back. While there are some exceptions, it typically involves proving that you have some sort of undue hardship that will make it impossible to pay the loan back.
Fraud Related Debts
Any debts related to fraud will not be discharged. This is common if someone has fraud-related debt that is on a credit card. Even though credit card debt can be discharged, having fraud involved will mean that the debt must be repaired.
Forgotten Debts
It is crucial that you include all of your debts in your bankruptcy petition. If you forget to include a debt, there is no way to have the debt included after the bankruptcy has been approved. You'll be stuck with that debt and end up having to pay it due to an error on your part.
To learn more, contact a Chapter 13 bankruptcy attorney in your area.
