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Debts That Defy Bankruptcy

While bankruptcy is a great way to eliminate many debts, there are some debts that are not dischargeable under bankruptcy. There may be exceptions to these rules, but generally speaking these debts are immune to the normal discharge process. The attorneys at Oswalt Law Group in Phoenix try to help their clients discharge as much debt as possible, but also help them understand the limitations of bankruptcy in terms of discharging debt. According to these attorneys, the following debts may not be dischargeable under bankruptcy:

  • Most taxes, including federal and state income taxes as well as property taxes, are not dischargeable under bankruptcy. While it is possible that tax bills may be negotiated and reduced, including reductions of penalties and fees, as a result of a bankruptcy, there is nothing in the law to force a judge to discharge these types of debts.
  • Student Loans. Unfortunately, students have had little success in discharging their student loan debts. Even though many student loans total tens of thousands of dollars, students are often not allowed to discharge these debts even if they are unable to find a job. While it is possible that a judge may find that a student loan can be discharged under a very limited set of circumstances, it takes a great deal of work to achieve this goal, if it is possible at all.
  • Child Support and Alimony. Most court-ordered payments are not dischargeable under bankruptcy. However, someone who has been ordered to make payments based on a certain level of income may be able to petition the court for a reduction if he or she experience a significant change in assets. This may be the case in a bankruptcy, and the bankruptcy filing may be used to support such a motion.

What Should I Do If I Cannot Discharge Debt?

While the protection of bankruptcy may not be available to help you discharge certain debts, removing other debts may make them more manageable. A bankruptcy may be able to help you discharge credit card and other unsecured debts while reaffirming secured debts such as your mortgage. This can help you find the disposable income to pay your taxes, student loan payments or alimony and child support payments. In order to file a bankruptcy properly and take full advantage of these protections, you may need the help of a bankruptcy attorney such as those at the Oswalt Law Group in Phoenix. Contact us today for more information.

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