Debt Exempt From Bankruptcy
by: AdrianFletcher |
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Strange as it may seem for somebody filing for bankruptcy but some outstanding debts are exempt from the process. What this means is that regardless of the outcome of a bankruptcy process, you will still have to pay off these debts. This article will cover the main types of debts that are considered to be exempt and give you advise on how to determine what you will and won't have to pay for after the process is completed.
Many people are concerned about maintenance payments and child support. For anyone that has a court order requiring them to pay these amounts then bankruptcy will not exempt you from paying any outstanding money. Thus any debts that have been accrued in supporting these awards are not covered should you file for bankruptcy. All of the law chapters are included in this, including the personal chapter 7 and chapter 13. A lot of people think that filing for bankruptcy will absolve them (or at least protect them) from this debt. However the laws mean that they will have to find this money in full.
IRS liens are another common debt that is not protected against in the courts. This occurs when you have to pay back taxes to the IRS but can't afford to, so they put a lien on your house or take it out of your wages on a monthly basis. Sadly this sum of money can be quite large as it may stretch back many years and is not exempt from bankruptcy.
Since I have mentioned the government, it is important to understand that any government loan is exempt form bankruptcy. This includes things like student loans that were financed by the government.
Finally, any court orders where you are ordered to pay an individual a specified sum of money are also considered to be exempt from bankruptcy.
These are some of the reasons why you should go into the process of bankruptcy fully aware of your responsibilities and the limits of the laws. For example, you could well have more debts that the courts can't do anything about. It would defeat the purpose of filing if you ended up with a low credit history and still had a huge outstanding debt with people.
Thus remember to get a firm understanding of your financial health before beginning such a process. You must quantify all you monthly outgoings and long term debts. With this knowledge in hand, you should determine whether your debt or outgoings fall into any of the mentioned categories.
What's more, you need to find out if there are any court judgments against your name. In most cases you will be notified if a litigation process against you is beginning. Once again remember that the courts will not protect you against these should you file for bankruptcy.
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About the Author
Do you know the implications of bankruptcy, especially exempt assets for bankruptcy and debt exempt from bankruptcy . Adrian writes on ways to deal with debt.
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