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Certain debt remains after filing for bankruptcy

On Behalf of | Aug 31, 2021 | Personal Bankruptcy | 1 comment

Pursuing bankruptcy represents a big step toward financial recovery. However, before doing so, you have many questions along with concerns about how bankruptcy can help, its lingering effects as well as what debt for which you will remain responsible.

While bankruptcy rids you of the burden of paying certain things such as medical debt, credit card debt, utility bills and personal loans, this process does not wipe away all debt. Please be prepared to understand this.

Child support, taxes and student loans

Among the debt that remains after a bankruptcy filing includes:

  • Child support: If you owe child support for your minor children, you must continue to pay until they reach 18. That money is needed to pay for things such as medical costs, education and a child’s basic needs.
  • Alimony: Your former spouse legally deserves this, and you cannot refuse to pay him or her. However, since your finances may be in disarray, you may request payment modifications in certain situations.
  • Taxes: This list includes most federal, state and local taxes. You must pay tax liens on your property, too. In certain situations, taxes that are several years old may be discharged.
  • Student loans: Most people who seek bankruptcy must keep paying their student loan debt. Under certain circumstances, though, student loan debt may be forgiven if it represents a significant amount that leads to undue hardship for the debtor and his or her dependents.
  • Money owed to the government: A bankruptcy does not wipe out criminal and municipal court-related fines and restitution. This money may be related to convictions on traffic violations and criminal charges.
  • Debt incurred for causing injury or death to others while driving drunk or under the influence of a controlled substance: Bankruptcy does not wipe out any civil penalties you must pay as the result of a lawsuit.

You take control of your financial life by filing for bankruptcy, but you must understand that certain debt remains. You have come this far by taking this important step. Now, you still have a few more goals to accomplish. You can do it.