Although known as a “debt-forgiveness bankruptcy,” filing for Chapter 7 bankruptcy won’t wipe clean every form of debt you have.
Called “Non-Dischargeable Debts or Claims,” we’re always sure to clarify to our Beloit bankruptcy law clients which debts will be discharged with Chapter 7 and which debts will not.
What Are Non-Dischargeable Debts/Claims?
Following is a comprehensive list of all forms of debt that won’t be forgiven when filing Chapter 7:
- Most taxes
- Debts incurred by fraud or through false writings
- Creditors that are not listed in the bankruptcy
- Domestic support obligations such as child support or alimony
- Fines and Penalties paid to a government unit
- Student loans (except in cases of undue hardship)
Although this list is standard, if based in Beloit or surrounding areas, please speak to a Beloit bankruptcy attorney about how this list applies to you personally.
For example, although Non-Dischargeable Debts or Claims cannot be forgiven, there are other ways to address these debts.
Other Ways to Address Non-Dischargeable Debts or Claims
In the case of Student Loans, you likely have two options.
1. Income-Based Repayment Plan (IBR)
IBR exists to help make student debt more manageable.
In order to qualify, you must have what’s called a partial financial hardship, meaning that the “monthly amount you would be required to pay on your IBR-eligible federal student loans under a 10-year Standard Repayment Plan is higher than the monthly amount you would be required to repay under IBR.” Essentially, IBR allows debtors to pay based on what they earn.
2. Debt Consolidation
In addition to an IBR, you may be able to address Non-Dischargeable Debts through a debt consolidation plan.
In the case of Domestic Support Obligations, your best course of action is to file Motions based on changes in circumstances.
If for any reason you are unable to address Non-Dischargeable Debts or Claims in these ways, consider speaking directly with a creditor to work out a settlement, lower interest rate, or new payment plan. A qualified Beloit bankruptcy attorney can walk you through how best to secure this option with creditors.
For a free initial consultation with a Beloit Bankruptcy Law or Rockford Bankruptcy Law attorney,contact The Fitzgerald Law Firm today. We recognize that not everyone is capable of meeting during traditional business hours—let us know a time that’s convenient and we’ll do our best to accommodate you.