Bankruptcy

Just as certain assets are exempt from bankruptcy, so are certain debts. Certain debts that you may accumulate will still have to be paid, whether or not you file bankruptcy. These debts are considered debts exempt from bankruptcy law.

One example of debts exempt from bankruptcy is child support. If you have been ordered to pay child support payments, or maintenance, by a court order, filing bankruptcy will not alleviate these debts. Child support debts will not be reduced or eliminated, whether or not you file Chapter 7 or Chapter 13 bankruptcy. Many people try to avoid paying these obligations, but child support is considered to be one of the debts exempt from bankruptcy.

Another example of debts exempt from bankruptcy is IRS liens. An IRS audit is never pleasant, and in some cases, the IRS may put a lien on your home or garnish your wages. Although IRS liens and garnishments can end up costing someone quite a bit of money, IRS liens are debts exempt from bankruptcy.

Judgments from court orders that award another individual or creditor a certain amount of money acquired in a lawsuit is another example of debts exempt from bankruptcy. Such judgments cannot be discharged, and for this reason, those who have not paid their bills in quite a while, should find out if there are any judgments outstanding awarded by the court against them prior to filing bankruptcy. Creditors sometimes sue an individual for not paying their bills, however this is usually a time consuming measure and it takes quite a while for a judgment to actually be ordered by the court. Furthermore, the individual is supposed to be notified of any pending litigation. If a creditor does manage to get a judgment against you prior to your filing bankruptcy, the judgment will be considered a debt exempt from bankruptcy. For this reason, those who are considering filing bankruptcy must do so in a timely manner.

Government loans are also considered debts exempt from bankruptcy. If you have student loans funded by the government, you will not be able to have them discharged by filing bankruptcy.

If you are thinking about filing bankruptcy, examine your debt to discover which bills are considered debt exempt from bankruptcy prior to filing.

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