Although bankruptcy is intended to provide a fresh start to people who may have gotten in over their heads, the process does not automatically wipe the slate of all debts. Certain debts may only be reduced partially and other debts may not be reduced at all. The end goal of a bankruptcy proceeding is to receive a discharge from bankruptcy. When a discharge is received, the debtor is no longer legally obligated to pay the debt. But a knowledgeable Chandler bankruptcy attorney like Clint W. Smith understands that certain debts are not eligible for a discharge order.
Since 1998, student loan debt has been expressly excluded from being discharged in bankruptcy. It is very difficult and extremely uncommon to receive relief from your student loans while in bankruptcy. In order to have student loans discharged in bankruptcy, your attorney must show that the loan causes an undue hardship on either you or your family. Essentially your bankruptcy attorney needs to show that the cost of the student loans prevents you from providing even a basic standard of living. In Arizona, your Chandler bankruptcy attorney can work with you to establish an undue hardship, if in fact you meet the definition.
The government gives strong support to a policy of encouraging parents to provide for their children, especially in the case of a divorce where one parent has been ordered to pay child support to the other. A delinquent parent who owes back child support will not get the benefit of a bankruptcy discharge in regard to the owed support payments. While other debts may be discharged, this debt is considered too important to be wiped away.
A federal tax lien placed on your properties by the IRS is not dischargeable in bankruptcy. Although Chandler bankruptcy attorneys can work with clients to find other avenues to eliminate the tax lien, the bankruptcy court does not provide a discharge for this debt. It is important to be on the lookout for such a lien if you owe any back taxes. The IRS lien remains on your credit report for up to ten years.
If you or your business has been sued and lost, with a judgment being entered against you, this debt cannot be discharged. Where you have lost a case and are ordered to pay some sum of money, this judgment creditor is protected from the bankruptcy court and cannot be discharged.
The law firm of Clint W. Smith, P.C. can help you. Take a look at the top 10 myths of bankruptcy or the 5 most common questions about bankruptcy. Contact our Mesa, Arizona office at 480-807-9300 or toll free at 877-290-9493. Our firm serves the surrounding areas of Mesa, Chandler, Tempe, Scottsdale, and Gilbert, Arizona.
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