A common misconception that people have about filing for bankruptcy is assuming that all of their debts can be discharged with their bankruptcy case. This, however, is not necessarily true, as there are some very specific types of debt that will persist despite a bankruptcy case. In other words, despite successfully filing for bankruptcy, people may still be on the hook for repaying certain debt. This debt is referred to as non-dischargeable debt.
In this two-part blog, we will discuss the debt that won’t be discharged through bankruptcy. Before we delve into our discussion of non-dischargeable debt, it’s important to point out that, even though some debt will persist through bankruptcy, this debt relief process can be pivotal in getting other debt – like, for example, credit card or mortgage debt – discharged, which can help free up funds so that they can be put towards paying off the non-dischargeable debt.
Types of Non-Dischargeable Debt
- Student loan debt – Any private or government-funded loans that you have taken out to pay for your education will likely not be able to be discharged by filing for bankruptcy. Although student loan debt is non-dischargeable, however, this type of debt is usually associated with lower interest rates than other types of debt, and it may be possible to request a payment forbearance during a period of time (like, for instance, a month or two) when you are unemployed.
- Certain court–ordered payments – If you have been ordered by a family court to make spousal support and/or child support payments, any debt you’ve accrued for missing payments cannot be discharged through a bankruptcy case. While this debt will persist, however, it’s important to point out that you may be able to get the amount of payments reduced in the future by filing for a modification with the family court.
- Financial penalties associated with civil or criminal cases – When a criminal or civil court case results in you being ordered to pay restitution or compensation, these financial penalties are considered to be non-dischargeable debt.
For example, non-dischargeable debt associated with criminal court cases can specifically be DUI court fines while non-dischargeable debt associated with a civil case may be a judgment against a person in a personal injury case.
For our continued discussion regarding non-dischargeable debt and bankruptcy, be sure to check out the second part of this blog that will be posted soon!
Colorado Bankruptcy Lawyers at the Law Office of Jon B. Clarke, P.C.
If you are overwhelmed by seemingly insurmountable debt and are looking for a financial fresh start, contact the trusted Colorado debt relief and bankruptcy lawyers at the Law Office of Jon B. Clarke, P.C.
For more than 35 years, Mr. Clarke and his diligent support staff have been successfully helping our clients resolve even the most complex bankruptcy cases for both individuals and businesses alike. Our experienced legal professionals are committed to providing each of our clients with the personalized debt relief assistance they need, and we will work tirelessly to ensure that our clients’ cases are resolved as favorably and efficiently as possible.
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For a thorough assessment of your situation, along with expert advice regarding the best manner in which to move forward to unburden yourself from debt, call us at (866) 916-3950 or email us some details about your situation by clicking here.