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What filing bankruptcy can’t do

On Behalf of | Apr 13, 2022 | Personal Bankruptcy

Bankruptcy is a powerful solution for many financial issues. It may help stop a foreclosure, wage garnishments and eliminate some of your debt. 

For many people, this is all they need. However, if you are considering filing for bankruptcy, it’s important to understand the process fully. While knowing what it can do is great, it’s also important to know what it can’t do. Having all this information will help you decide if this is the right move for you. 

It won’t eliminate child support or alimony payments

Regardless of whether you file Chapter 7 or Chapter 13 bankruptcy, you won’t eliminate your child support or alimony payments. You must still pay these in full. 

You can’t eliminate all tax debt

In many situations, you won’t be able to include federal tax liens in your bankruptcy filing. However, it may be possible to include older unpaid tax debts. Usually, this is considered on a case-by-case basis.

Personal injury settlements related to alcohol aren’t included

If you have been ordered to pay a personal injury settlement or settlement for wrongful death after a car accident involving intoxication, you cannot include the debts in your bankruptcy filing. You must still pay these in full. 

Your choice of bankruptcy may also affect what you can discharge

The debts you can include in bankruptcy also depend on the type you are filing. For example, with Chapter 7 bankruptcy, you can eliminate some debts by your non-exempt assets may be liquidated. With Chapter 13 bankruptcy, your debts are restructured to help you repay them without the financial hardship you had before filing. 

Is bankruptcy right for your situation?

With this information, you should be ready to decide if filing bankruptcy is the right solution for you. It can help relieve some of your financial burdens and help you regain secure financial footing. However, knowing the big picture is important when you need to make an informed decision. 


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