When youâ€™re overwhelmed by debt and unable to pay it within a reasonable time from, bankruptcy may appear to be your only solution. In most instances, filing can give you the relief that you desperately need… depending on what debts you are struggling with.
With Chapter 7, you may have to liquidate non-exempt assets to satisfy your creditors, but in the end, the majority of your debts will be permanently discharged, allowing you to start afresh financially. Chapter 13 enables you to bundle all of your obligations together into a single, court-approved payment plan so that you keep as many assets as possible while paying down the debts. Certain types of debt, however, cannot be discharged in a New York bankruptcy and must be paid in full, either during the Chapter 13 repayment plan or during and after your Chapter 7.
Below is a list of the debts that cannot typically be discharged in bankruptcy:
- Outstanding child support payments
- Alimony owed to a former spouse or spousal maintenance to a current spouse
- Restitution that you have been ordered to pay in a personal injury case
- The majority of student loans
- Income tax balances that are less than three years old
- Traffic fines and court fines
- Fines and restitution due to criminal activity
- Debts that you fail to list on your bankruptcy application
Secured debts are treated differently than their unsecured counterparts. Even after you declare bankruptcy, you must continue to make regular payments on secured debts such as car loans and mortgages in order to keep the property.
If one of your creditors decides to dispute your discharge request, then a US bankruptcy court judge can declare the debt non-dischargeable at their discretion. Common reasons why a creditor may challenge your discharge include:
- Debts that you incurred fraudulently, such as maxing out all of your credit cards prior to filing for bankruptcy
- Debts arising from acts of larceny, embezzlement, and other illegal acts
- Debts owed under a divorce settlement
- Debts that result from malicious or willful acts of damage to another personâ€™s property
- Loans and cash advances over a certain amount if they were taken out within 60 days prior to your bankruptcy filing
- Purchases of luxury items and services over a certain amount if they were taken out within 60 days prior to your bankruptcy filing
If you are struggling with a major debt load, then a New York bankruptcy attorney can help you get a fresh start by helping you select the chapter that is most appropriate to your circumstances and advising you on what needs to be done to achieve a debt-free future. Your attorney can also advise you on how to manage non-dischargeable debts so that you get through this difficult time as smoothly as possible. If you are considering filing for personal bankruptcy, then contact the law office of Jayson Lutzky. Mr. Lutzky has more than 33 years of legal experience and has helped many clients regain their financial freedom. Call 718-329-9500 to schedule your free in-person initial consultation or visit www.MyNewYorkCityLawyer.com.