Most people know that filing a chapter 7 bankruptcy can bring about a refreshing amount of debt relief. In fact, you might end up with no debt at all once all is said and done and your bankruptcy is final. Unfortunately, there are three categories of debts that may not go away when you file bankruptcy. Since a complete picture of what bankruptcy can do for you is vital, read on to learn more about what debts cannot be included in your chapter 7 filing.
The Child Support Obligation
It only makes sense that something that involves an innocent, minor-aged child would be one of the three major exceptions for debt relief. The family court system orders one parent to pay the other a certain sum of money that is meant to pay for the care of a child. When a parent gets behind on the payments, the child support enforcement agency can take punitive actions in an attempt to get the money. If your wages have been garnished because of owing back child support, that order will remain in place despite a bankruptcy filing. If you have liens placed upon your property, the liens will remain in place until you pay what you owe. If you are behind on your child support payments due to a major change in your income, you may be able to have the amount of the support reduced until you get back on your feet. You cannot, however, include back child support on any type of bankruptcy.
The Student Loan Obligation
Student loans are another major financial obligation that plagues many people's financial situation and that cannot be included on a bankruptcy filing. That goes for both private and government-backed student loans. In some rare cases, you may be able to apply for a hardship exception if you meet the qualifications. You must not already be in arrears on your loan at the time you ask for the hardship discharge, however.
The Internal Revenue Tax Obligation
When you owe "Uncle Sam", you can expect penalties and interest to pile up quickly. Unpaid taxes from the last three most recent tax periods are never discharged using a chapter 7 bankruptcy. Taxes owed from prior to that period may be discharged, however. On a positive note, the IRS cannot place any new liens on your property for unpaid taxes once you file.
To learn more about debts that cannot be discharged, contact a local law firm.