For people struggling with the weight
of debt, the idea of filing for bankruptcy, having that debt “forgiven,” and
starting again with a clean slate can be a huge
relief. Unfortunately, not all debt is easily dischargeable (i.e. eliminated) in
bankruptcy. Attorney Douglas Mitchell takes care to advise his Northern and Central New Jersey clients that
some common financial obligations – obligations like the following – must often
still be met, bankruptcy or no:
and Alimony Payments
Child support and
alimony payments can never be discharged in bankruptcy because they’re
considered a priority debt. Bankruptcy cannot discharge obligations to pay past-due
child support or alimony payments. However, by discharging other debt,
bankruptcy may free up cash flow, which can make it easier to make these
Penalties and Restitution
If you owe fines, other penalties
or restitution (money you’re ordered to pay back to the victim of a crime) as
part of a criminal sentence, these amounts cannot be discharged in Chapter 7 bankruptcy.
Under Chapter 13 bankruptcy, however, they can be paid out over time.
Most Tax Debt
Don’t count on tax debt
being discharged in bankruptcy. Since nothing is as certain as death or taxes,
tax debt is dischargeable only in very specific
circumstances. Even if a Chapter 7 bankruptcy eliminates your obligation to pay
the debt, any tax lien filed on your property will remain.
It’s also very difficult
to discharge student loan debt in bankruptcy. To do so, you must show that
payment of the debt will impose an undue hardship on you and your dependents.
The standard for what is an “undue hardship” is relatively high.
with Death or Injury Caused by DUI
discharge debt for death or personal injury caused by your operating a motor
vehicle while under the influence of alcohol or drugs.
If filing for bankruptcy
seems a necessary course of action for you, it’s wise to consult with an
experienced bankruptcy attorney who can help you sort out which of your debts are
and are not dischargeable. Here in Northern and Central New Jersey that attorney is Douglas
Mitchell. Contact Mitchell Law Offices today.