Divorce can turn everything upside down, or at least it may seem that way. Some people find that following their divorce, they cannot keep up with their financial obligations. This often leads to them filing bankruptcy.
Chapter 7 bankruptcy can help you get back on your feet by discharging your unsecured debt. However, there are some debts that you cannot include in your plans.
What is non-dischargeable debt?
U.S. bankruptcy code does not allow you to include non-dischargeable debt when you file for bankruptcy. These types of debt include:
- Child support and alimony are considered non-dischargeable debts. If your ex was ordered to pay you $800 per month in child support, they must continue to pay you even if they file for bankruptcy.
- Back taxes can be included in a Chapter 13 bankruptcy, which allows you to restructure your payment plans. However, most tax debts cannot be charged off in a Chapter 7 bankruptcy. There are a few exceptions to the rule. If your tax debt is more than three years old, you may be able to discharge the debt with the help of an attorney.
- Student loans cannot usually be discharged in bankruptcy, whether you file Chapter 7 or Chapter 13. If you can prove to the court that you have made good faith payments and your current financial status is not going to change anytime soon, it may be possible to include your student loans in Chapter 7. However, most judges take a hard stance when it comes to repaying student loans, so don’t count on the loans being discharged.
The best thing you can do if you are considering filing for bankruptcy is to get help from someone who understands the legal aspects involved.