According to the American Bankruptcy Institute, 2015 bankruptcies were down 10 percent from the previous year. This is good news for most consumers, unless you're facing mountains of debt yourself. If you're considering a bankruptcy to help you get a new financial position, you might wonder if you can discharge all your debts under the bankruptcy code. The quick answer is no, you can't. Here is a list of some of the debts you will still have to deal with following a bankruptcy:
- Secured loans - The most common types of secured debt are your mortgage and car loans, but it could be any debt backed by collateral. You can discharge this debt, but you have to give the property back. Provided you keep paying the loan, you can keep your car or house.
- Taxes - Under certain conditions, you might be able to discharge your tax debt. However, not many people meet the requirements, as they are quite stringent. Prepare to pay this debt back.
- Domestic support obligations - Child and spousal support are generally not dischargeable in a bankruptcy. However, if you owe money because of a marital property division, this debt may be forgiven.
- Student loans - As with most government debts, student loans are not typically dischargeable. The one exception is in demonstrating you have an undue hardship, such as a disability.
- Government debts - If you owe the government fines or penalties, you probably won't be able to discharge these payments in your bankruptcy. This includes certain property taxes and money owed because you violated securities laws and regulations.
- Condominium dues and fees - You may not be able to discharge these fees, especially if you plan on remaining in your condo.
- Loans owed to a pension or retirement plan - Typically, you won't be able to discharge these debts.
In a bankruptcy, you must list all your debts. If you fail to list a debt, it won't be dischargeable. If you occurred debt due to fraud or false pretenses, these are dischargeable, but the creditors can file a lawsuit asking that the debt is honored. It is a complex aspect of the bankruptcy code.
Talk to a bankruptcy attorney before filing your bankruptcy
The law is complex when it comes to discharging debt. Our experienced bankruptcy attorneys are here to help you relieve your stress and get a better financial outlook. We want to guide you through the process and make sure you meet your obligations. Give us a call today.