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Bankruptcy may seem like a one-and-done cure-all for all your financial troubles, but there are actually a surprising number of different kinds of debt you can’t lose in bankruptcy – even if you’re filing for Chapter 7 bankruptcy. Below are just a few examples.

Government Debts

In most cases, taxes, penalties, customs, or any other government debts you’ve acquired cannot be discharged in bankruptcy. However, special circumstances may apply, so make sure you speak with your bankruptcy attorney about these debts.

Alimony & Child Support

There is no type of bankruptcy that allows for the forfeit of a person’s responsibility to make their alimony or child support payments.

Student Loans

If you thought you could go to college, and then immediately declare bankruptcy to wipe your slate clean early in life, you’re gravely mistaken. Student loans are only ever discharged in extreme situations in which a person is determined by the court to have already done everything they could possibly do to keep current on their payments.

Property Liens

Sadly, your home mortgage and/or other property liens cannot be discharged along with your other debt no matter which type of bankruptcy you file. In fact, if your income is deemed too low to qualify for a Chapter 13 bankruptcy, your home or property may even be foreclosed upon to help cover the cost of your other debts.

Auto Loans

Like a home mortgage, auto loans cannot be discharged during bankruptcy, and may even be at risk of liquidation depending on the type of bankruptcy you file. Fortunately, if you want to keep your car, all you have to do is “reaffirm” your auto loan and continue making your payments in full, and on time.

Criminal Debts

If you owe money for any sort of criminal charges, including those related to larceny, fraud, embezzlement, drunk driving, or any other “willful and reckless acts,” these debts cannot be discharged.

New Credit Card Debt

Just because you’re planning to file for bankruptcy, doesn’t mean you can go on one last shopping bender before you go clean for good. Any recent charges or purchases you make can be seen and scrutinized by the very people who determine whether or not you’re even allowed to file for bankruptcy – and how do you think that judge is going to feel when you plead with him about not being able to pay off medical bills when you just wracked up another several hundred dollars in credit card debt on fancy restaurants and new shoes?

Debt That’s Not Yours

You’d be surprised at how many times people try to file for bankruptcy, and have debt discharged, only to find out that the debt in question isn’t even in their name. If you are divorced or think there is any possibility your debt is not your own, make sure you discuss it with your bankruptcy attorney to avoid any unnecessary hassle.

For more information regarding your unique situation, such as which debts you will and will not be able to discharge, we urge you to get in touch with our remarkable bankruptcy attorneys at Church and Korhonen, PC, today. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

The differences between Chapter 7 bankruptcy and Chapter 13 may not be all that apparent to those who don’t have a firm understanding of what bankruptcy is, but they are significant. Knowing the distinctions between the two can mean the difference between your fresh start and a truly complicated mess.

Chapter 7 Bankruptcy

If you’ve always believed there was only one type of bankruptcy, and it offered a totally clean slate, you we’re likely thinking of Chapter 7 bankruptcy. To file for Chapter 7 bankruptcy , a judge has to swoop in and determine if your income is not suitable enough to support a repayment plan. Your assets, including your home and vehicles, are surrendered and sold to help pay off your unsecured debts, and any amount leftover is then wiped away with the exception of student loans, child support, and other government debts. In order to qualify for Chapter 7 bankruptcy, a filer must earn less in income than the median income of their state. However, the entire process can typically be completed in only a few months. Though a Chapter 7 bankruptcy will persist as a blemish on your credit report for up to 10 years, it is the best way to wipe your hands clean of almost all financial obligations with minimal inconvenience.

Chapter 13 Bankruptcy

Depending on your income, this may be the only type of bankruptcy you’re able to file, but the good new is Chapter 13 is almost everyone’s preferred type of bankruptcy. It allows debtors to maintain possession of their assets by agreeing to a reasonable 3 to 5 year repayment plan based on their current income and quantity of debt, and will even forgive your remaining debt once the agreed upon time frame is met. In addition to avoiding the liquidation of all your assets, Chapter 13 bankruptcy will only stay on your credit report for up to seven years! Sure you’re agreeing to keep paying off your debts versus just tossing them aside like you would with a Chapter 7, but the long-term rewards are much greater.

Which Should You File?

There are benefits and consequences on both sides, and you may not have as much of a choice as you think when it comes to choosing which way you’d like to file. The only way to know for sure you’re making the right decision for your family is to put your trust in knowledgeable, caring bankruptcy attorneys who want to help you succeed, like ours at Church and Korhonen, PC. Reach out to one of our exceptional bankruptcy lawyers, today, to learn more. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.