Debts That Remain after a Bankruptcy

Although bankruptcy is a powerful tool against many types of debt, there are certain types of debt that cannot be discharged in a bankruptcy.

2013-01-31

January 31, 2013 (Press-News.org) Debts that remain after a bankruptcy

If you have had to file bankruptcy recently due to the sluggish economy, you're not alone. Bankruptcy has many benefits, but the main reason to file is to receive a discharge of your debts. Normally, once you receive a discharge, you are under no further legal obligation to pay the debt. Although the bankruptcy discharge is a powerful tool against many types of debt, such a medical bills and credit card debt, there are certain types of debt that cannot be discharged in a bankruptcy.

Nondischargeable debts

To a certain extent, whether or not the debt is dischargeable generally depends on whether you file for Chapter 7 or Chapter 13 bankruptcy. The following debts are nondischargeable regardless of the type of bankruptcy filed:
-Debts that you fail to list on your bankruptcy schedules
-Alimony, child support and other domestic support obligations
-Recent federal, state and local taxes
-Tax liens
-Judgments in wrongful death of personal injury lawsuits that were incurred because you operated a motor vehicle, aircraft or vessel while intoxicated
-Debts obtained through fraud, false representation or false pretenses, including embezzlement and larceny
-Condominium or cooperative housing fees
-Governmental fines and penalties
-Most student loans (discussed later)

A Chapter 13 bankruptcy can discharge a slightly higher number of debts. The following are debts that are not dischargeable in a Chapter 7 proceeding, but are in a Chapter 13:
-Debts for willful and malicious injury to property
-Debts incurred to pay non-dischargeable tax obligations
-Debts as a result of property settlements in divorce or legal separation proceedings

It is important to note, however, that a discharge of the debts in a Chapter 13 bankruptcy are granted only after you have completed making all payments under a repayment plan. Therefore, you generally pay some of each debt, at least partially.

Student loans

Federal student loans are always nondischargeable in bankruptcy. However, technically, private student loans are dischargeable in bankruptcy. However, to do so, the debtor must prove "undue hardship"--a very tough standard. Although there is no definition for "undue hardship", most courts require the debtor to prove the following:
-The borrower cannot maintain a minimal standard of living for himself, herself or dependents.
-The borrower's dire financial situation is likely to continue for a significant portion of the loan's repayment period.
-The borrow has tried, in good faith, to repay the loan before filing bankruptcy.

Since the debtor essentially has to prove that he or she will never be able to pay the loan, the undue hardship standard is very difficult to meet, as it requires proving that a future event is certain to happen.

Consult an attorney

Although many types of debt are nondischargeable under bankruptcy, you should not let it discourage you from considering it. Many people, once free from the burden of paying other dischargeable debt, find that they are able to more easily pay their nondischargeable debt.

However, bankruptcy is not for everyone. If you are considering filing bankruptcy, contact an experienced bankruptcy attorney. In addition to determining whether bankruptcy is right for you, an attorney can advise you of your debt-relief options and recommend one that fits your personal situation.

Article provided by Law Offices of Brian A. Barboza
Visit us at http://www.barbozalaw.com

ELSE PRESS RELEASES FROM THIS DATE:

Should California Grant Driver's Licenses to Undocumented Immigrants?

2013-01-31

Should California grant driver's licenses to undocumented immigrants? Whatever your position on the issue, there is no denying that undocumented immigrants make up a significant portion of California's population. Like other Californians, many of these immigrants need to drive in order to run errands, take their children to school or go to work. However, because they are residing in the United States illegally, they are not eligible to get driver's licenses. Increasingly, many legislators and safety advocates in California are becoming concerned that these unlicensed ...

Study Reveals Thousands Of Preventable Surgical Errors Occur Annually

2013-01-31

Study reveals thousands of preventable surgical errors occur annually Placing your well-being in the care of a medical professional is always somewhat unnerving, requiring a degree of trust in another's abilities not often needed in our daily lives. Consequently, when a physician's actions are negligent and result in entirely preventable harm, we understandably seek avenues to recover. Unfortunately, a recent study conducted by Johns Hopkins University School of Medicine has disclosed the frequency with which surgeons are guilty of making preventable errors while ...

How To Protect A Business From The Fallout Of Divorce

2013-01-31

How to protect a business from the fallout of divorce Marriage and business often go hand-in-hand. Frequently in this economy, one spouse or both spouses may own their own business or both spouses may even own a business together. The creation of a successful business requires a lot time and hard work and is likely to be the most important financial asset in a marriage. Unfortunately, more than half of first marriages in the United States end in divorce as do the majority of second and third marriages. Therefore, divorce and business also go hand-in-hand, and business ...

Understanding The Divorce Process In Florida

2013-01-31

Understanding the divorce process in Florida Each state has its own rules for divorce, and as a result there are a lot of myths about the requirements of filing a divorce. The state of Florida no longer requires fault as a ground for divorce, and therefore the only requirement for a Florida resident to dissolve his or her marriage is to prove the marriage is "irretrievably broken." In Florida the official term for divorce is "dissolution of marriage," and either spouse may file for dissolution. While Florida is a no-fault state for the purposes ...

If You Need Disability Benefits, You May Be In For A Long Wait

2013-01-31

If you need disability benefits, you may be in for a long wait The stress of living with a disability can be overwhelming, but the added stress of dealing with the system to collect Social Security Disability payments can make it even worse. A backlog of cases has significantly increased the amount of time that applicants have to wait to get their benefits approved. Recent reports indicate that applications for Social Security retirement and disability benefits have skyrocketed in recent years. This is likely due to the growing number of baby boomers who are reaching ...

The Division Of A Military Pension In A Divorce

2013-01-31

The division of a military pension in a divorce A married couple with one or both spouses serving in the military can experience special challenges. There are often children involved, and one spouse may have to postpone or forgo education or employment to care for the children full-time while the other spouse is deployed. In addition, frequent moves and the stress of serving in the military can strain even the strongest relationships. In fact, statistics from the Department of Defense show there were almost 30,000 military divorces in 2011, which is the highest rate ...

Federal Regulators Target Debt Collection Companies With Aggressive Tactics

2013-01-31

Federal regulators target debt collection companies with aggressive tactics Harassing phone calls and threats of arrest are practices currently being used by aggressive debt collectors. Many of these tactics are not only rude, but illegal. In an effort to refresh current laws and remind debt collection agencies that creditor harassment will not be tolerated, the Consumer Financial Protection Bureau, or CFPB, is launching a new set of rules to ensure debt collectors are not violating the Fair Debt Collection Practices Act. The regulations are aimed at holding these ...

Recent Report Finds Older Americans Facing Increased Risk Of Foreclosure

2013-01-31

Recent report finds older Americans facing increased risk of foreclosure A new report by the AARP shows that older Americans are facing increased risks of foreclosure. The report, titled Nightmare on Main Street: Older Americans and the Mortgage Market Crisis, was the first of its kind to focus on how the recent difficulties of the housing market is impacting people over the age of 50. The report found that over 600,000 loans for people in this age group were in the process of foreclosure as of December 2011. In addition, over 1.5 million seniors lost their homes ...

Property Division During Divorce

2013-01-31

Property division during divorce People getting a divorce often have concerns about property division. Many couples are able to reach a property division settlement outside of court, and the divorcing spouses sign a settlement agreement that is generally approved by a judge. However, if the parties cannot come to an agreement, a family court judge will decide how to divide the couple's property based on Massachusetts law and will order a property award. Equitable distribution Massachusetts is an equitable distribution state, as distinguished from community property ...

How Are Florida Parenting Plans Determined?

2013-01-31

How Are Florida Parenting Plans Determined? One of the most difficult issues when a relationship breaks down is deciding where a child or the children will live. In the process of working out a parenting plan, each parent will generally have less time with the children. This can be a difficult adjustment. Developing a parenting plan and time-sharing (formerly known as child custody and visitation) agreement needs to account for the children's best interests. The court uses the "best interests of the child" standard when reviewing any agreements or deciding ...

LAST 30 PRESS RELEASES:

Scientists trace microplastics in fertilizer from fields to the beach

The Lancet Obstetrics, Gynecology, & Women’s Health: Taking paracetamol during pregnancy does not increase risk of autism, ADHD or intellectual disabilities, confirms new gold-standard evidence review