If you have a significant amount of debt, you may have decided that the best solution for your situation is to file for bankruptcy in Central New York. However, before you do this, you need to understand what non-dischargeable debts (debt you can’t wipe away) in bankruptcy mean and how this will impact your financial obligations after filing for bankruptcy.
At Grady BK, PLLC, we strive to provide our Central New York clients with the compassionate legal guidance they need throughout the process of filing for bankruptcy. We know that this process can feel confusing and stressful, which is why we will support you every step of the way so that you can get the best possible outcome. In this article, we will be discussing non-dischargeable debt in Chapter 7 and 13 bankruptcy and how this will impact your finances.
Non-Dischargeable Debts in Bankruptcy
One of the purposes of filing for bankruptcy is to have certain types of debt discharged (wiped away) so that they are no longer your financial obligation. This provides the much-needed financial relief that many Central New York residents need if they have found themselves in a difficult financial situation. However, whether you file for Chapter 7 or Chapter 13 bankruptcy, you may have to face non-dischargeable debts that you will have to continue to pay off even after bankruptcy.
Here is a list of non-dischargeable debts you will most likely have to continue to pay after you have filed for bankruptcy in Central New York:
- Federal, state, and municipal taxes that have come due within the last three years cannot be discharged in bankruptcy.
- Court-ordered payments such as alimony and child support are non-dischargeable.
- Property settlements and divorce attorney fees are not dischargeable in bankruptcy cases.
- You cannot discharge student loans.
- Any type of fines in relation to criminal proceedings are not dischargeable, such as court costs and debt incurred by criminal activity or negligence.
If you aren’t sure what type of non-dischargeable debt you will be left with when you file for bankruptcy, you need to hire a Central New York bankruptcy attorney. An attorney will be able to look at your specific situation so that you can better understand what your dischargeable and non-dischargeable debt will look like.
What Happens After You File For Bankruptcy?
After you have filed for bankruptcy, you will need to continue addressing non-dischargeable debt in bankruptcy since these debts are still your financial obligation. For instance, if you have filed for Chapter 13, this bankruptcy option requires you to create a repayment plan outlining how you will pay off your debts over the next 3 to 5 years. The non-chargeable debt in Chapter 13 bankruptcy will need to be outlined in your repayment plan.
Chapter 7 bankruptcy, on the other hand, lets you discharge certain debts without the need for a repayment plan. After this has been done, you will need to continue to pay non-dischargeable debts such as child support, certain taxes, and student loans. In most situations, once your dischargeable debts have been taken care of, you will have the financial resources left over to address non-dischargeable debts.
The good news is that whether you file for Chapter 7 or 13 bankruptcy, you will be protected from collection efforts from creditors, such as garnishments, lawsuits and harassment.
How to Prepare For Bankruptcy in Central New York
If you want to proceed with filing for bankruptcy in Central New York, there are specific steps you need to take so that this process goes smoothly. The very first thing you need to do if you are considering bankruptcy is hire a bankruptcy attorney who can assist you in deciding on the best option for your financial situation. From there, they can help you begin the filing process through the necessary forms and documents.
Here are some additional steps to take in preparation for bankruptcy:
- Stop incurring debt: Before you file for bankruptcy, you need to stop using any credit cards, taking out loans, or otherwise incurring any more debt.
- Organize financial documents: When you file for bankruptcy, you will need a variety of financial documents to showcase your financial situation (pay stubs, tax returns, etc.). Ideally, you should begin collecting these documents several months in advance in order to paint a clearer picture of your finances.
- File any outstanding tax returns: If you have any federal or state income tax returns that have not been filed you will need to prepare and file them before filing for bankruptcy.
- Do not transfer assets out of your name: You should never transfer property or assets out of your name without any type of payment, as this can come across as fraudulent. If you want to transfer the title of something to someone else, your attorney can help you do this the correct way.
Central New York’s Top Compassionate Bankruptcy Attorney
Before you file for bankruptcy in Central New York, you need to have a thorough understanding of what this will mean and what non-dischargeable debts you will be left with. At Grady BK, PLLC, we will be here to help you with every step of the bankruptcy process, whether you choose to file for Chapter 7 or Chapter 13 bankruptcy. Having a Central New York bankruptcy attorney on your side can help alleviate some of the stress of this process, allowing you to proceed with confidence.
At Grady BK, PLLC, we have extensive experience handling bankruptcy cases in Central New York and can provide a personalized approach that meets your needs. Every client is our top priority and we strive to ensure that they feel heard and seen throughout the bankruptcy process.
Contact us today at 315-299-9005 to discuss your financial situation with a bankruptcy attorney. Our team at Grady BK, PLLC, is here to provide you with the legal assistance you need as you get ready to file for bankruptcy.
