The Limits of Bankruptcy Protection

While bankruptcy can be the beginning of financial freedom, it also has limits. Some debts will survive a bankruptcy filing, and you should be aware of these to avoid any surprises. Consulting an experienced Washington DC bankruptcy attorney will give you a better understanding of what bankruptcy can and cannot do for you.

What Bankruptcy Cannot Do

If you file for Chapter 7 Bankruptcy, you will still owe the following debts:

  • Bankruptcy will not stop a secured creditor from repossessing your secured property – a bankruptcy discharge will eliminate your debts, but it will not eliminate your liens under a secured credit agreement
  • Bankruptcy will not eliminate child support and alimony obligations – you will still have to pay these debts even if you file for Chapter 13
  • Bankruptcy will not wipe out student loan debt – except in very limited circumstances where you will have to show that you cannot afford to pay your loans now, and that you will not  be able to pay them in the future (a tough standard to meet)
  • Bankruptcy will not eliminate debts you forget to list in your filing, debts for personal injury or death caused by drunk driving, and fines and penalties for violating the law such as traffic tickets and criminal restitution

If you decide to file for Chapter 13 protection, you will have to pay the above-listed debts in full as part of your payment plan.

Furthermore, if a creditor convinces the judge that you incurred a debt through fraud, it will survive the bankruptcy. This includes lying on a credit card application or passing off borrowed property as your own to use as collateral.

As always, contact an experienced Washington DC bankruptcy lawyer for a free consultation specific to your financial situation.

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