A personal bankruptcy can be an effective way to deal with debts such as loans and credit cards, but it can’t erase all types of debt. After bankruptcy, you will still be liable for government debts, such as student loans and taxes. You will still have to pay child support, alimony and other settlements, and you’ll still be responsible for court costs and fines. Here, you will learn about the debts still owed after bankruptcy.
Bankruptcy, Child Support and Alimony
When you petition the court for bankruptcy, you must still pay child support and alimony. If you choose Chapter 13 rather than Chapter 7, you can typically add alimony and child support to the court-approved repayment plan. Doing so stops family courts from making further collection attempts or garnishing your pay check.
Some other family expenses may dischargeable under personal bankruptcy. If you want to buy your spouse’s share of the marital home, you may be able to have that debt discharged. Your Bankruptcy Attorney in Washington Indiana will tell you which expenses can be eliminated, and which you will still be required to pay.
Are Judgments Dischargeable in Personal Bankruptcy?
Before you file for bankruptcy, a creditor can sue you and win a judgment. The judgment allows creditors to garnish your wages and freeze bank accounts, but a successful bankruptcy can make these judgments disappear. In almost every case, you will have to pay fines for law violations, such as traffic tickets and criminal fines, or personal injury debts accrued as the result of a DUI crash.
Choosing to Reaffirm Some Debts
In some cases, debtors choose to reaffirm a portion of their debts. In reaffirmation, instead of eliminating a debt, the borrower and the lender come to a new agreement. Reaffirmation is a logical step if you want to keep collateral such as a car or a home, and it allows you to keep making payments.
A Bankruptcy Attorney can Help
America’s bankruptcy laws are complex, and every case has special circumstances. Here we have provided a generalized, brief introduction to the topics of bankruptcy and debt. For information and legal advice specific to your case, we recommend that you consult a Bankruptcy attorney in Washington Indiana.