Filing bankruptcy will erase all my debts and I will have a clean slate!
While Chapter 7 bankruptcy may be the best option for you if your debt is unmanageable and creditors are merciless (here is some information on how to deal with them), it's important to realize that you may possess certain debts that are not dischargeable. Here is a brief explanation of 5 of the financial obligations that will NOT be wiped clean by filing bankruptcy.
Government issued student loans. Unfortunately, millions of Americans carry the burden of student loan debt, and chapter 7 will not lighten that load at all.
Alimony and child support. Individuals who file bankruptcy will still be required to make alimony and child support payments.
Restitution under civil or criminal law. Restitution ordered under civil law in instances where the individual has caused injury or death as a result of a willful and malicious action cannot be discharged in bankruptcy. By the same token, if the debtor has committed a criminal act and has been ordered restitution, such restitution will not be discharged.
Debts for personal injury caused by a DUI. If driving while under the influence resulted in the injury of another person, debts incurred from this incident would remain with the debtor after the bankruptcy.
Federal tax liens. Filing Chapter 7 bankruptcy will not eliminate a tax lien. If a tax lien was recorded in the property, it will remain until it is paid off.
While filing bankruptcy can offer some relief from creditors, it is imperative that an individual considering this option examines all the resulting aspects. Make certain it will accomplish everything that is expected.
Contact us for sound, expert legal advice before you make your next move.