If you are facing an overwhelming amount of debt and don’t have the means to pay your creditors, declaring bankruptcy may be a viable solution. As long as you meet the eligibility requirements and comply with the filing process, there’s a good chance your debts will be absolved, leaving you with a fresh financial start. However, the law doesn’t view all types of debt equally, and there are certain monetary obligations that a bankruptcy filing cannot wipe out. Here is some insight into the different kinds of debt you will be responsible for once your bankruptcy case is complete.

What Debts Will Still Need to Be Paid?

Debts Never Eliminated in Bankruptcy 

The U.S. Bankruptcy Code lists several debts that are non-dischargeable, meaning they are unable to be eliminated when declaring bankruptcy. The majority of these are referred to as secured and priority debts. They include child support, alimony, mortgage, car loans, fines owed as the result of harming someone else or breaking the law, condominium dues, and loans owed to a pension or retirement plan. It’s also important to note that you can’t discharge any debts obtained by fraud, debts that weren’t discharged in a previous bankruptcy, and debts acquired after filing.  

Debts That Are Challenging to Expunge

In most cases, student loans and back income taxes are also considered non-dischargeable in bankruptcy. However, under rare circumstances, some debtors are given the chance to erase these debts. To discharge a student loan, debtors must be able to show they have experienced a permanent or long-lasting undue hardship that prevents them from having the funds to pay back the debt. Income tax debts cannot be discharged unless a debtor is able to obtain a special exemption by petitioning the court and explaining why they are entitled to relief.

To determine whether or not filing for bankruptcy will be beneficial for your financial situation, it’s best to consult an attorney who specializes in this area of law. The legal team at Pray Law Firm can help evaluate the type of debt you have and explore your best options for finding financial relief. With 40 years of combined experience, the team has successfully guided numerous North Little Rock, AR, residents through the bankruptcy process, giving them the opportunity to overcome debt. Call (501) 771-7733 to discuss the current state of your finances, or visit them online for answers to frequently asked questions.