Boston Bankruptcy Attorney

Limits of Chapter 7 Bankruptcy

While filing for Chapter 7 bankruptcy has many benefits and is able to do many things for a person facing tremendous debt, it is not a complete fix for your debt problem. While bankruptcy may be a viable option for you, you should know that there are limits to what Chapter 7 bankruptcy can do for you.

Bankruptcy is not able to eliminate or discharge all of a person’s debts. Tax debts, in the majority of cases, cannot be eliminated by bankruptcy proceedings. There are few very limited exceptions, such as old debts due to unpaid income taxes, but the majority of taxes must be paid. Even if a person has old income tax debts, there is a very long list of eligibility requirements that have to be met.

In addition to not being able to discharge all debts, filing for bankruptcy will not save all property. While it is true that it will save a large portion of what a person owns, it is possible for that creditor to take the property in order to pay off the debt if a creditor has a secured debt.

Also, bankruptcy cannot eliminate child support and alimony payments. Both child support and spousal support payments are unaffected by bankruptcy. They will remain regardless of whether a person files for bankruptcy. In addition, the majority of states have a minimum child support payment which a person is required to provide, regardless of the financial situation.

Student loans are not eligible for discharge either. Beside certain special cases where the former student can prove that paying off college loans will cause “undue hardship,” former students are stuck with their loans. To qualify to have debts removed, a person must be able to show an inability to pay off the debts now, as well as an inability to pay them off in the future. This is typically not an easy standard to meet.

Contact a Boston Bankruptcy Lawyer

If you are considering filing for bankruptcy and are in need of a lawyer, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346 to discuss your situation and determine if bankruptcy is right for you.