Bankruptcy Cannot Eliminate All Debt

: Chris Lee Law Firm

  Filed under: Debt

not all debt eliminatedCertain types of debt cannot be wiped out during the course of bankruptcy. If you wish to continue to live in your house, you must continue to make house payments. If you want to keep your vehicle, you must continue to make your car payments. Depending on the type of bankruptcy you file and what you want to do with your secured assets, either on a court-approved payment plan like in Chapter 13 or allow those assets to be taken by the trustee to liquidate and disperse the money to your creditors in a Chapter 7 bankruptcy.

Most of the time eliminating your credit card debt as in Chapter 7 allows you to get caught up with your secured debt and make it easier to keep on a good financial track.

Alimony and Child Support

If you owe child support or alimony, the law is very clear that you are required to continue to make these payments. If you owe back alimony or child support, your ex-spouse can petition the court to ensure payments will be given priority status in disbursement payments.

The automatic stay that prevents creditors from proceeding with any actions to collect a debt from you does not apply to alimony or child support payments.


Bankruptcy will not eliminate tax debt that is less than three years old. To have your old tax debt discharged you will have to qualify for these three requirements.

The date on the tax return is at least three years prior to you filing bankruptcy
The return was filed at least two years before you filed bankruptcy
The IRS assessment is at least 240 days old
And you are not guilty of tax evasion or tax fraud

Student Loans

It is very difficult to have your student loans discharged in bankruptcy. You will have to prove “undue hardship” for you to pay back this debt. To prove this, you must be disabled to the point that you can no longer work and not be able to get employment in the future.

If you would like to find out what can be eliminated in your bankruptcy, contact a Fort Worth bankruptcy lawyer to learn the best options for your financial situation.

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