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Debts Not Erased By Bankruptcy

What debts are not erased by bankruptcy?

Many people filing for bankruptcy are surprised to find out that not all of their debts are discharged – that is, erased. Certain debts are not eligible for discharge, including:

Back taxes
Child support and/or alimony
Any debts that resulted from a government fine or legal decision – for example, DUI fines, personal injury suits, damage to the property of others, unpaid parking tickets, and so on
Student loans
Some types of condominium or cooperative housing fees

In many bankruptcy proceedings, the debtor does have a right to challenge which debts are or are not discharged, but so do the debtor’s creditors. A creditor, such as a bank or a credit card company, can object with the court in writing before the deadline set in the bankruptcy notice. If the court finds that the debtor has provided incomplete paperwork, fraudulent records, a failure to account for lost assets, etc., the court can side with the creditor and force the debtor to repay the debt in full. Given that some of the reasons for denying a discharge can be as minor as incorrectly completing paperwork, Californians facing bankruptcy should seriously consider hiring an attorney.

File for Bankruptcy in California

You owe it to yourself to find a qualified California bankruptcy attorney. Your California bankruptcy lawyer will make sure you have fulfilled all the requirements for filing for bankruptcy, such as fulfilling the requirement to receive credit counseling from an approved government organization within 180 days before you file.

A bankruptcy attorney in California can also help you determine for which type of bankruptcy you qualify by a bankruptcy means test. The outcome of a bankruptcy means test will decide whether you can file for Chapter 7 bankruptcy, in which most of your unsecured debts are completely discharged, or a Chapter 13 bankruptcy, in which your bankruptcy attorney works with the court to design a realistic payment plan to get your finances back on track.

Don’t underestimate the importance of relying upon a bankruptcy lawyer in California. For people in debt, it’s very tempting not to add to their financial woes by paying legal fees. With your finances already in a precarious state, you don’t want to risk making them worse by trying to file for bankruptcy yourself.

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