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What Debts Are Exempt From Bankruptcy |
By:
Adrian Fletcher |
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What Debts Are Exempt From Bankruptcy
Adrian Fletcher
Despite the fact that you are declaring bankruptcy, you may be surprised to find out that certain debts are exempt from this process. What this means is that no matter what the outcome of a bankruptcy hearing, you will still have to service or pay these debts regardless. This article will give you some common examples of debts that are exempt and advise how you should proceed if you are contemplating bankruptcy.
One controversial area of debt exemption is that dealing with child or maintenance support. If you are paying or have been ordered to pay these moneys by a court then they are generally considered to be exempt from bankruptcy. Again, this means that you will have to find money to pay these regardless of if you have successfully filed for bankruptcy. This includes all the law chapters, including Chapter 7 and Chapter 13. Sometimes people will file as they see this as a way to avoid their responsibilities but this will not help them. Rather they will have to come up with all the outstanding money.
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.
As we are talking about the government, it shouldn't be forgotten that any form of government loan is seen as exempt from bankruptcy. This applies to government student loans too, that are a very common and useful way of financing education costs.
And the last important debt that is exempt from bankruptcy is any court orders that are handed down to you to pay a sum of money to a creditor before the bankruptcy process was ever instigated.
These are some of the reasons why you should understand the full consequences of filing for bankruptcy. For instance, you may have a number of debts that can never be cleared by the courts. After all you don't want to have a low credit rating, the stigma of filing for bankruptcy and still owe a huge amount of money to people.
So it is vitally important that you get a good audit of your personal finances before you think about bankruptcy. You have to calculate your monthly income and work out all the outgoings and long standing debt. Simply put, if any of your monthly outgoings or long term debt are any of the types mentioned above then you should reflect on filing for bankruptcy.
Another thing is to determine if there are any court judgments held on your name. This should be known as it is part of the law to notify the defendant in any litigation proceedings. Again you are not protected against these should you file for bankruptcy.
Find out more on the bankruptcy process, especially http://www.bankruptcyfixup.com/bankruptcy/exempt-assets-for-bankruptcy-18/) exempt assets for bankruptcy and http://www.bankruptcyfixup.com/bankruptcy/debt-exempt-from-bankruptcy-19/) debt exempt from bankruptcy . Adrian discusses dealing with debt.
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Article Source: http://www.statssheet.com/articles/article69402.html |
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