In 2005, the bankruptcy laws were changed to make it more difficult for people declaring bankruptcy to file Chapter 7, which completely discharges many forms of debt. Rather, many people, wage earners especially, will be pushed in Chapter 13 bankruptcy which provides some relief but still requires some kind of repayment. As a St. Louis chapter 13 bankruptcy attorney, this reorganization will allow a person to repay a portion their debts based on the amount of income they make. After a period of three years or five years of repayment, the debt is considered discharged.
Some types of debt, however, must be repaid in full. This debt is known as “priority debt” and will not be generally not be lessened by filing bankruptcy (exceptions can be made, but they are rare). This debt can include:
- Child support
- Student loans
- Tax liabilities
- Fines from the commission of a crime
Because this debt will not be discharged, it is important to speak to a qualified bankruptcy attorney before rushing to file. If your largest debt will not be discharged, it may make little sense to file. And it may be that other options are available, including working out a deal with IRS or with student loan collectors. A knowledgeable attorney will go over all your options and find the best choice for you to get out of debt.
If your main debt is not priority debt, however, it is a good idea to consult a St. Louis Chapter 13 bankruptcy attorney to find out how you can get out from under this weight. Chapter 13 gives a person a chance to pay back a fair amount relative to what they make, giving them a fresh start when this process is completed. For a free consultation, contact Westbrook Law Group right away.