Debts and Financial Obligations

Last year, more than one million Americans turned to bankruptcy for relief from overwhelming debt. However, bankruptcy does not discharge all debt; even after a debt discharge, filers are left with several important classes of financial obligations that they must continue to pay, including:

• Student loans. Unless a debtor can show that he will never be able to make payments because of the severe financial hardship it will cause, he will remain responsible for student loans.
• Alimony and child support. Court-ordered spousal support or child support must continue to be paid, despite bankruptcy. Unlike many other debts, any missed child support or alimony payments must be repaid in full.
• Court-ordered fines and restitution. Any financial obligations ordered by a court will survive bankruptcy.
• Financial obligations resulting from drunk driving. If a debtor owes any money because of an accident he caused while drinking, he will still be responsible for these debts after bankruptcy.
• Recent back taxes. Taxes owed from the last three years will still be owed after bankruptcy.
• Debts incurred through fraud. Any evidence of fraud will negate a debt discharge. Fraud may be more subtle than debtors realize. For example, courts have taken the position that, if a debtor charges extravagant purchases to his credit card when he knows he will declare bankruptcy and the debt will be discharged, this qualifies as fraud.
• Debts not listed on initial bankruptcy paperwork. A bankruptcy petition must include a list of all the debtor’s creditors and how much he owes each one. It is vital that this paperwork is filled out completely and correctly, because any omitted debts will not be covered by the debt discharge.

Before filing for bankruptcy, schedule a consultation with an attorney to discuss your debts and how they will be treated in bankruptcy. In the Schaumburg area, count on Cutler & Associates to provide the experienced bankruptcy representation you need.

The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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