subject: Debt Relief Bankruptcy - What Debts Are Exempt From Bankruptcy? [print this page] One area of contention that always crops up is the issue of child support or maintenance payments. If a court has ordered you to pay anything towards these awards then any existing debt is considered exempt of bankruptcy proceedings. Once again, this means you will have to find this money and won't be protected by the court. This applies for all the law chapters, including ch 7 and ch 13. Often people will see bankruptcy as a way to get out of their responsibilities in terms of these payments. They will have to pay the support in full.
Another common debt that is exempt is known as IRS liens. First a little background, if you have been audited by the IRS at some point and found to owe them money they can enforce a lien on your house or garnish your wages. Depending on the amount you owe the government, this amount can add up to a large amount of money that is, unfortunately, exempt from bankruptcy.
Since I have mentioned the government, it is important to understand that any government loan is exempt form bankruptcy. This includes things like student loans that were financed by the government.
And the last important debt that is exempt from bankruptcy is any court orders that are handed down to you to pay a sum of money to a creditor before the bankruptcy process was ever instigated.
This is why you should get informed about the limitations of the bankruptcy laws and your obligations should you proceed. It is incumbent on you to understand what debts the courts can help you with and those that they can't help you with. After all, there is a certain embarrassment about filing for bankruptcy, that includes losing your credit rating - you don't want to have all the debt too.
Thus remember to get a firm understanding of your financial health before beginning such a process. You must quantify all you monthly outgoings and long term debts. With this knowledge in hand, you should determine whether your debt or outgoings fall into any of the mentioned categories.
Additionally, you should find out if there are any outstanding judgments awarded by courts against you. You will be aware of this (even if you have chosen to forget it) as the law requires you to be notified if any litigation process is begun against you. To clarify, you can't be protected by the bankruptcy law against these types of debts.
Debt Relief Bankruptcy - What Debts Are Exempt From Bankruptcy?
