Will I Still Owe Some Debts After Bankruptcy?

Depending on the type of debt you owe, some debts might survive the bankruptcy discharge. In both Chapter 7 bankruptcy and Chapter 13 bankruptcy some unsecured debts may be discharged but secured and nondischargeable debts may still exist after your case is closed. Below are a list of some debts that may survive the bankruptcy discharge and suggestions on how to setup repayment plans.

#1 – Student Loan Debt.  Student loan debt is very difficult to discharge in bankruptcy.  They can be discharged if repaying them presents an unreasonable hardship to the debtor. However, the unreasonable hardship requirement is very difficult to prove.  With that in mind, bankruptcy debtors have a wide array of repayment options for student loan debt. If you have federal student loans visit  www.direct.ed.gov  to explore repayment options.

#2 – Child Support. Whether you owe back child support or you are just trying to meet your current child support obligations, this type of debt cannot be discharged in bankruptcy. Chapter 13 bankruptcy does provide viable options for repaying back child support; but if you file Chapter 7 bankruptcy, you will need to work out some type of payment arrangement that’s satisfactory to all parties.  If you need to reduce the amount of child support you pay due to finances, you will need to go to family court.

#3 – Some Tax Debts. A debtor’s most recent tax debts definitely cannot be discharged in bankruptcy.  However, older tax debts might be dischargeable if they meet the bankruptcy code’s rules. Speak with your bankruptcy attorney about your tax debts so that you can plan accordingly. If some or all of your tax debts survive bankruptcy, the IRS provides flexible payment arrangements in addition to a forbearance program. State and local tax debts are another matter.  Each municipality and state has its own rules about tax debt repayment, so you will need to inquire with them about reasonable repayment arrangements after bankruptcy.