While a Chapter 7 or Chapter 13 bankruptcy offers a discharge of many types of debt, some debts are never dischargeable or can only be discharged if you show that an exception applies. The following types of debts are nondischargeable:
- Spousal and child support payments
- Debts for willful and malicious injuries to persons or property (dischargeable only in Chapter 13)
- Debts owed to the government for fines or penalties
- Certain types of tax debt
- Student loans (unless your prove that a hardship exception applies)
- Debts for personal injury caused by the debtor while driving intoxicated
- Debts for some cooperative housing fees
You will continue to be responsible for these debts after you receive your bankruptcy discharge.
How Bankruptcy Helps You Handle Nondischargeable Debt
While bankruptcy won’t offer you a discharge from these specified types of debt, it will free up some of your income that you can use to pay off these debts. Once your credit card debt, debt from medical bills, and other unsecured debt has been discharged, you will have more money available to pay off your student loans or other nondischargeable debts.
To develop a plan for paying off your nondischargeable debt, you may want to talk to a budget consultant about your financial situation and goals. The bankruptcy discharge offers you a fresh financial start, so make sure that you take advantage of it by developing a realistic financial plan and staying disciplined about managing your expenses.
You should also be aware that after you receive a bankruptcy discharge, you can’t receive another discharge for several years. For Chapter 7 filers, you won’t be able to receive another Chapter 7 bankruptcy discharge for eight years. Some credit card companies may send you offers because they know you won’t be able to file bankruptcy anytime soon, so be smart about using credit, and avoid taking on debt that will interfere with your ability to pay off your nondischargeable debts.
Get Help Managing Your Nondischargeable Debt
You may have options available for managing or reducing some of your nondischargeable debt, depending on the type and amount of debt. For example, some nondischargeable tax debt owed to the IRS can be settled for a reduced amount. Income-based repayment may also be available for some types of student loan debt, which can reduce the amount you need to pay each month.
For more information, talk to your bankruptcy attorney about managing debt after bankruptcy.
At the Law Office of Barbara B. Braziel, we are here to give you the fresh start you deserve. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.