Chapter 7 bankruptcy discharges most of your unsecured debts, including medical bills and unpaid income taxes, in exchange for some of your assets. Chapter 13 helps those burdened with temporary financial hardship pay back a portion of their unsecured debts, including mortgages, through a repayment plan. If you are considering filing for either, a bankruptcy attorney will evaluate your debt and devise a strategy to get you back on your feet financially. Although bankruptcy is the best way for some to alleviate debt, there are a few types of debt that cannot be discharged.
What Type of Debt Does Not Qualify for Bankruptcy?
1. Government Fines & Penalties
If you received a government fine, you owe the money no matter the circumstance. Bankruptcy does not serve as a tool to extinguish government-owed debt whether it is at the local, state or federal level. Examples of government-issued fines include income tax penalties; building code violations, bail bond forfeitures, restitution fees, and road tolls. A bankruptcy attorney can help you determine whether your debt qualifies for liquidation or not.
2. Child Support and Alimony
If you owe money to a former spouse as part of a separation agreement or divorce, you won’t be able to remove the responsibility through bankruptcy. If you owe alimony to a former spouse and the money was ordered to be used as maintenance or support, you will be unable to have the debt forgiven. While you will be unable to completely discharge the obligation, if you choose to file under Chapter 13, you will be given up to five years to pay it off under a repayment plan. For that reason, it’s important to consult with a bankruptcy attorney when considering filing so that you’re able to choose the best chapter to fit your needs.
3. DUI-Related Injuries or Death
The injured party’s claim in a DUI-related incident for items such as medical expenses and lost wages are eligible to be discharged in a bankruptcy filing. However, if alcohol or drugs were the cause of the accident, the ability to utilize bankruptcy as a means of ridding yourself of the debt is lost. Neither Chapter 7 nor Chapter 13 bankruptcy discharge a debtor from any debt for death or personal injury caused by the debtor while under the influence of alcohol or drugs.
If you are considering filing for bankruptcy, have your debts evaluated by a highly skilled and diligent bankruptcy attorney. In the business for over 40 years, the staff at Achille Law, P.C. in Jefferson County, PA, hold the institutional knowledge necessary to provide you with top-tier debt guidance and advice. Call (814) 849-6701 to schedule a consultation or visit their website to learn more about their services.