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Going To Bankruptcy Court

Jun 11, 2008
The bills are piling up, debt collectors are calling daily, and there seems to be no end in sight. For many people there is just not enough money to pay the bills and put food on the table. No one wants to file bankruptcy, but if no amount of budgeting will get you out of debt, then bankruptcy may be your only option. However, bankruptcy is not the end of your entire debt dilemma. Although many debts may be discharged in bankruptcy court, there are several debts that are not dischargeable under the new bankruptcy laws. These are debts that you will still be expected to pay even after filing for bankruptcy. Before filing, educate yourself on the new bankruptcy laws.

Alimony and Child Support is Still a Priority

Don't expect to get out of alimony or child support obligations in bankruptcy court. Under the Bankruptcy Abuse Prevention and Consumer Protection Act, these debts are of the highest priority and collection efforts will continue on these obligations even after bankruptcy relief is sought.

Back Taxes Must be Paid

It use to be that if you had back taxes you could file a Chapter 13 bankruptcy wherein payments on these taxes were a part of their Chapter 13 repayment plan. As such, once the bankruptcy process was complete a person would no longer owe any back taxes. However, The Bankruptcy Abuse Prevention and Consumer Protection Act changed this so that these taxes can no longer be discharged.

Student Loans May or May Not be Discharged

Even after filing bankruptcy, you may still be expected to repay your student loans unless you are completely disabled. In the past, private student loans were dischargeable under Chapter 7 bankruptcy. But now the Bankruptcy Abuse Prevention and Consumer Protection Act weighs private loans the same as government guaranteed loans. The only way to discharge a student loan under the current bankruptcy laws is to prove that repaying these loans will cause undue hardship on you or your family. And usually the only people who can prove this are those who can no longer work due to a serious illness or disability.

Conclusion

The decision to file bankruptcy can be a tough one and understanding the new bankruptcy laws can be confusing and frustrating. A person seeking bankruptcy relief should seek the help of an experienced bankruptcy attorney to ease them through the process. Filing bankruptcy may be a tough process but one that will ultimately relieve you of some of the burden of your debt.
About the Author
Can debt settlement companies help you get your debt paid off faster? Get the inside scoop on the Debtopedia website at www.Debtopedia.com where you'll get your free copy of my report Secrets Of Credit Card Debt
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