It’s one of the most common misconceptions that bankruptcy attorneys in NYC have to deal with: the erroneous belief that filing for bankruptcy will make all debts disappear.
While bankruptcy can discharge (eliminate) a substantial amount of debt, there are certain types of debt that are permanently exempt from being discharged. There are also several different types of bankruptcy filings, so whether or not a debt can be discharged in your situation is best left to discuss with one of the many expert bankruptcy attorneys in NYC.
The federal Bankruptcy Code lists 21 different types of debts that are subject to being ineligible for discharge. Again, the type of bankruptcy you file will dictate whether a debt can be discharged, but as a general rule, bankruptcy attorneys in NYC advise potential clients that the following types of debts will not qualify for discharge under most personal bankruptcy cases:
Alimony and Child Support: The courts deem family obligations to be a matter of top priority, and strive to protect and maintain the interests of dependents and/or the ex-spouse. Bankruptcy attorneys in NYC have seen far too many cases where one spouse has sought bankruptcy protection as a means to avoid paying alimony, only to be told that alimony and child support are ineligible for discharge.
Taxes and Liens: You probably knew this one was coming. While the government wants to give struggling consumers the chance at a fresh start, Uncle Sam made sure to position himself near the top of the list for repayment. As such, most taxes and liens are exempt from discharge, both under Chapter 7 and Chapter 13 filings.
Student Loans: As much as bankruptcy attorneys in NYC would like to help struggling students, again Uncle Sam is not quite so forgiving. While it used to be possible to wipe out student loans under the protection of bankruptcy, the increased volume of loans, as well as the skyrocketing cost of an education that drove up loan amounts caused the government to exclude student loans from discharge.
If you’re wondering which of your debts might qualify for discharge, it’s important to consult with one of the many reputable bankruptcy attorneys in NYC before proceeding, so you don’t make a financial misstep that won’t really help you in the long run.
