Discharging Your Debt Through Bankruptcy
If you are feeling the financial burden of your mounting debt, you may be considering bankruptcy as an option to help you get a fresh start. Filing for bankruptcy can be an effective way to help reduce your debt load, but only if you have the right kind of debt. Many consumers mistakenly believe that all of their outstanding debt can be discharged in a bankruptcy, but this simply isn't true.
Here are three types of debts that you might not be able to include in your bankruptcy.
1. Child Support
Divorce can create some serious financial problems, but not all of these financial situations can be resolved through a bankruptcy. Authorities estimate that over $100 billion is owed in overdue child support by parents throughout the nation.
If you are feeling the weight of your child support debt, then bankruptcy may not be the answer. You will not be able to discharge your child support debt through bankruptcy. You should speak with your lawyer about your options if child support debt is causing you problems.
2. Student Loans
Many people choose to take out loans in order to pay for secondary schooling. Repaying these loans can be challenging if you are unable to secure viable employment. If you can't afford to make your monthly student loan payments, then you may be considering bankruptcy as an option.
Unfortunately, bankruptcy courts are extremely reluctant to discharge student loan debt. You should work with your lawyer to see if you meet the undue hardship provision that will allow you to include your student loan debt in a bankruptcy filing.
3. Court-Imposed Fines
Some people find that the fines levied against them during court proceedings can be a source of serious financial stress. Since these fines represent a type of punishment, the government typically does not allow court-imposed fines to be included in a bankruptcy filing.
If you are unable to pay off your court fines, you should speak to your lawyer about your options. You may be able to create a structured payment plan that allows you to make affordable monthly payments based on your income.
Understanding the types of debt that you may not be able to include in a bankruptcy filing will help you determine if bankruptcy is the solution to your financial problems. Your lawyer will be able to evaluate your unique debt load and advise you as to whether or not bankruptcy is your best option. For more information, contact companies like O'Connor Mikita & Davidson LLC.