How To Get A Fresh Start With Chapter 7 If You Have Debts That Are Not Discharged
Chapter 7 bankruptcy is often known as the best method to use to obtain a fresh start, but this is not always completely true. If you have debts that cannot be discharged in Chapter 7, you may not be able to entirely get a fresh start. Filing for Chapter 7 could still help, though, and here are several things to understand about debts that cannot be discharged in bankruptcy.
Debts that cannot be included
Any unsecured debts you have can typically be discharged through Chapter 7; however, there are certain debts that cannot usually be included. These include the following debts:
- Child support and alimony
- Tax debt
- Student loans
If you have any of these types of debts, bankruptcy can still be a good option.
How bankruptcy can still help
One of the ways Chapter 7 will help with debts that cannot be discharged is by freeing up the money you do have. If you qualify for Chapter 7 and can get your unsecured debts discharged, it could potentially free up a lot of money you have.
For example, if you currently pay $1,000 per month towards your unsecured debt payments, you will no longer have these debts to pay once you file. In this situation, you could use this extra monthly money to pay off the debts that could not be discharged. A bankruptcy lawyer can help you figure out exactly what debts would be discharged and which would not be if you file for Chapter 7.
There might be options for your other debts
While it is almost impossible to get out of paying the full amount you owe for alimony and child support, there are methods you can use to pay less for tax debts and student loan payments. For tax debts owed to the IRS, you might be able to reduce the amount you must pay by using an Offer in Compromise (OIC). This is a method that allows you to work out a repayment plan with the IRS that involves settling on a lower amount than what you actually owe.
You may also be able to use a debt-forgiveness program for the student loan debt you have. To qualify for this type of program, you will have to meet certain conditions and requirements.
If you want to learn more about Chapter 7 bankruptcy and the benefits it could offer to you, contact a bankruptcy attorney in your area. You might learn that this would be a great way to get a fresh start with your finances. Speak with a professional like John D Rouse to learn more.