When you file for bankruptcy, chances are that you are trying to discharge an overwhelming amount of debt. Yet before you make the bankruptcy official and begin your refinancing and/or liquidation, you will want to make sure that the debts you need to satisfy can be remedied through bankruptcy. Certain creditors collecting special debts won't recognize a discharge through bankruptcy. If you fail to figure this out before you file, it could toss you into even deeper waters financially.
Taxes cannot be discharged through bankruptcy. Any taxes that you owe at the local, state, or authority level will not be satisfied any other way than with a payment. With a Chapter 13 bankruptcy, you may be able to refinance so that you will be able to afford your taxes, but you will still need to repay the amounts owed in full. In certain cases, income tax may be a special exception to this rule. In a Chapter 7, people who meet a specific list of criteria can eradicate their income tax with their bankruptcy.
These people must be dealing solely with income taxes. This excludes any payroll taxes or fraud penalties. If a person receiving income has not committed fraud or willful evasion, and the debt is over three years old, then you may be able to eliminate income tax. You will also need to file a tax return and pass the 240 day rule. This rule insinuates that the tax has been assessed by the IRS at least 240 days before you file your bankruptcy, or it has not been assessed when you file. If the IRS suspended collection activity because of an offer in compromise, then the time limit might be extended for you.
In addition to almost all taxes, all legally imposed fines must be paid according to the terms stated, and they can't be satisfied with a bankruptcy. Many times, these fines are the punishment for a crime, and nothing can erase the fact that you have a punishment to satisfy. You will need to carefully budget so that you can fulfill these court-ordered payments. If you cannot gratify your fine because of a financial problem, then it is best to save up your money. You may be able to pay your fine in separated payments if that is a better option. Talk to your legal authorities about options.
Fraud cannot be discharged through the bankruptcy process. This is any sort of credit that was obtained by false means. Fraud is a criminal activity, and is not excused with something as simple as a bankruptcy. Instead, you will need to pay back the fraud in full. Also, any sort of alimony must be satisfied with a full payment as ordered by the court. You cannot abandon these responsibilities in the midst of a bankruptcy. Because alimony and other child supports are court-ordered, they will make sure that you hold up your end of this bargain.
Compensation must be paid according to any court order, and will not be discharged with a bankruptcy. Any lawsuits such as a personal injury case or a wrongful death issue will need to be mollified as ordered. Also, any debts that were incurred after the bankruptcy began and any debts that were not included in the original application will not be discharged, so it is very important to list all the financial obligations you wish to acquit. Double check and review to make sure that you have listed anything. Also, remember that your future earnings heavily influence which of your debts are discharged. If the bulk of your debt is not dischargeable, then you may want to consider an alternative to bankruptcy. The best option is to contact a lawyer and discuss your situation before making any commitments.