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.
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.
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.
Before going down this route you should conduct a thorough audit of your finances. You should qualify all your outgoings and your current monthly income. If any of the outgoings are any of the above them you may want to reconsider filing for bankruptcy.
Additionally, you should find out if there are any outstanding judgments awarded by courts against you. You will be aware of this (even if you have chosen to forget it) as the law requires you to be notified if any litigation process is begun against you. To clarify, you can't be protected by the bankruptcy law against these types of debts.
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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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