Highly-Qualified Topeka Bankruptcy Attorney
The main purpose of bankruptcy is to give honest debtors a fresh start.
However, a fresh start does not necessarily mean debt free. Certain debts
are not discharged by bankruptcy and you will remain obligated to pay
them after your bankruptcy case is complete.
The following is a list of common debts that are not generally discharged in
Chapter 7 or
Chapter 13. Keep in mind this is not an exhaustive list, as there are additional
nondischargeable debts. Also, keep in mind that there are certain exceptions
that may allow a generally nondischargeable debt to be discharged.
Pay special attention to the following debts:
- Recent taxes
- Other government debts
- Student loans
- Child support and spousal maintenance
- Court fees
- Damages related to DUI
- Debts incurred by fraud
- Debts not listed in the bankruptcy
If you file a Chapter 7 bankruptcy, you will remain obligated to pay all
nondischargeable debts after your case is complete, just as if you never
filed bankruptcy. For this reason, many people who owe certain nondischargeable
debts, such as recent taxes or child support and spousal maintenance,
opt to file a Chapter 13 so they can pay the debts in installments over
a period of three to five years. Talk with our
Topeka bankruptcy attorney to figure out which of your debts are dischargeable and whether Chapter
7 or Chapter 13 is best for your situation.
What do I do with my nondischargeable debt?
In order to fully realize the benefits of bankruptcy and to avoid further
financial difficulties, you need to have a game plan for dealing with
these nondischargeable debts after bankruptcy. When your bankruptcy is
complete, it is best to be proactive in dealing with any debts that remain
after receipt of your discharge. Keep in mind that interest continues
to accrue on debts while you are in bankruptcy and the longer you take
to pay them off the more you will end up paying.
You may receive a notification or bill from the creditor after bankruptcy.
Do not ignore these communications. If you cannot afford the amount requested,
contact the creditor or collector to arrange monthly payments that work
for your budget. The creditor is more likely to work with you if show
a willingness and desire to pay the debt and you follow through with your promises.
Our Topeka Bankruptcy Lawyer is Ready to Help
It's a common belief that a Chapter 13 Plan will take care of your
debt so you are only left with home mortgage and student loan payments
after completion of your Chapter 13 Plan. Unfortunately, it's not
quite that simple--there are a few debts that catch many by surprise.
Watch out for these snakes in the grass.
Even if you pay your taxes through a Chapter 13 Plan, interest on the debt
continues to accrue while you make your payments. Any interest that accrues
after the date you filed your bankruptcy case will not be paid through
your Plan. Expect to get a bill from the taxing authority after your case
is complete. Both the
Internal Revenue Service and the
Kansas Department of Revenue will accept monthly payments. Contact them as soon as possible to set
up payments. If you do not make payment arrangements or fail to respond
to their requests, you can expect further collection actions, including
setoff of your tax refunds, levy, and liens.
What about unemployment compensation?
Generally, unemployment compensation overpayments are discharged by bankruptcy;
however, Kansas law gives
Kansas Department of Labor (KDoL) the right to recover the debt from future unemployment benefits,
regardless of the bankruptcy discharge. There is no statute of limitation
on recovery of these debts and KDoL is allowed to charge interest. Since
KDoL is prohibited from contacting you in an attempt to collect the debt
as a result of the bankruptcy discharge, you may not find out about your
obligation until the next time you apply for unemployment compensation.
In order to avoid additional interest accruing in the meantime, you can
contact KDoL to set up payment arrangements.
Taking initiative to pay off a debt to a governmental entity goes a long
way. They are more likely to accept a lower payment amount and may even
reduce your balance or interest due if you show a good faith effort to
pay off the debt.
For answers to your questions, set up a free consultation today—(888) 253-4526!