Filing for bankruptcy can help you reduce or discharge debts, but there are limits to what types of debts are covered. For example, priority debts are non-dischargeable. However, they can still be included in a Chapter 13 Plan and the required payment through the Plan may be less than what was being demanded previously. Having priority debts should not deter you from considering filing, as you may also be able to reduce other types of debts and improve your overall personal financial standing. Hiring a Chapter 13 lawyer may create additional options.
As an example, child support is considered a priority debt and is non-dischargeable. The same goes for alimony payments. However, payments on past due amounts for child support and alimony may be scheduled through a Chapter 13 repayment plan. Judgments against drunk or drugged drivers cannot be discharged in bankruptcy but can also be scheduled in a Chapter 13 plan. Certain types of government debts can be tricky, but not impossible to discharge.
Should any of this deter you from considering filing? It should not, because you may find that filing for bankruptcy may create additional options that can help manage your financial situation.
Should You Still Hire a Chapter 13 Lawyer with Non-Dischargeable Debt?
Depending on what your personal financial situation is, non-dischargeable debts may be a minor issue. If your bankruptcy case discharges or lowers payments on nonpriority debts, it may free up money for priority debts.
For example, a person may owe child support, credit card debts and past due medical bills totaling $45,000. Let’s say hypothetically that credit card payments for this person are $600 a month. Medical bill payments are $350 a month. If this personal filed for Chapter 13 bankruptcy, it is possible he or she could lower payments on the medical bills and credit card debts. This would free up money that can be used to pay child support. Upon completion of the payment plan, the medical bills and credit card debts may be discharged.
See how filing for bankruptcy can still create options, even if debts cannot be discharged? Many people who file for bankruptcy discover that they have more maneuverability to pay off their other debts.
The Kansas City bankruptcy attorneys at The Sader Law Firm are dedicated to helping people find solutions for difficult financial problems.