If you’re struggling to stay afloat financially, you are not alone; many Georgia residents and people throughout the country are currently experiencing similar issues. There are often debt relief options available, which can ease financial strain and help lay the groundwork for restored solvency down the line. For example, you might qualify for a certain type of bankruptcy, either as an individual or business owner. However, it’s important to note that some debts are not dischargeable.
While it’s best to be an informed person, you need not lose hope if you have a debt that you cannot alleviate through bankruptcy. If you’re in dire financial straits, alleviating as much debt as possible can help get things back on track, even if the court cannot eliminate 100% of your debt. Navigating the bankruptcy system can be complex, which is why it’s a good idea to seek counsel ahead of time.
Do you have tax debt, or do you owe child support?
The U.S. government prohibits certain debts from being dischargeable through bankruptcy. If you owe taxes, for instance, you must pay the debt. Even if you’re approved for a bankruptcy program, your tax debt remains a liability. This is also the case if you owe child support or alimony. These are non-dischargeable debts.
Think of it this way, however — if you’re able to eliminate all your other debts, you may then have the funds you need to continue to pay non-dischargeable debts. Student loans are usually not dischargeable through bankruptcy, as well; however, in rare circumstances, exceptions to the rule may apply.
How to determine which bankruptcy program best fits your needs
Since there are numerous types of bankruptcy, you must first determine which program you’re eligible for and which one is the most viable solution to help you accomplish your goals. Each program works a bit differently from the others. For example, under Chapter 7 bankruptcy, the court will liquidate most of your assets, and the proceeds will pay off your debts.
Under Chapter 13, your lenders agree to a restructured payment plan, and you retain ownership of your assets while continuing to pay down debt. Sometimes, a lender will extend the life of a loan as part of a Chapter 13 agreement or lower monthly payments to make them more economically feasible for you while you regain financial stability. It’s best to seek guidance to learn what options are available and which debt relief program best fits your current financial needs.