It is never easy to make the decision to file for bankruptcy. However, it may be your only option if you cannot create a budget that will get yourself out of debt over the course of the next five years. If you file for bankruptcy, you should know that going to bankruptcy court could be a difficult task. This is because a lot of your debts will be discharged under bankruptcy, though there are several debts that cannot be discharged. These are debts that you are going to have to continue to pay off even after your bankruptcy has been discharged.
How Alimony And Child Support Stand Up In Bankruptcy Court
A bankruptcy court will not discharge alimony or child support obligations. Therefore, collection efforts can still continue herein even while you are in bankruptcy. This is because The Bankruptcy Abuse Prevention and Consumer Protection Act made these debts of the highest priority.
How Back Taxes Stack Up In Bankruptcy Court
It use to be that if you had back taxes you could file a Chapter 13 bankruptcy wherein payments on these taxes were a part of their Chapter 13 repayment plan. As such, once the bankruptcy process was complete a person would no longer owe any back taxes. However, The Bankruptcy Abuse Prevention and Consumer Protection Act changed this so that these taxes can no longer be discharged.
How Student Loans Add Up In Bankruptcy Court
You can no longer discharge any student loans unless you are now completely unable to work. This is different now than in the past because it used to be that private student loans could be discharged under a Chapter 7 bankruptcy. However, The Bankruptcy Abuse Prevention and Consumer Protection Act now gives private loans the same standing as government-guaranteed loans. So, the only way in which to have your student loans discharged now is to prove that repaying them is an undue hardship on either you or your family, which can only be done whenever you prove that you are no longer able to work either due to a serious illness or because you have been in a severe accident.
Conclusion
Now you can see why going to bankruptcy court can cause a lot of frustration. This is why an experienced bankruptcy attorney can be really beneficial to you. However, you also must consider that while filing for bankruptcy makes life harder, it will eventually give you a fresh start so that you can get back on your feet.
