What Bankruptcy Doesn’t Cover

If you’re struggling with debt and thinking about bankruptcy, it’s likely that you’re looking at more than a single debt. Mortgages, car payments, medical bills, and credit card payments can add up quickly and put you in need of effective debt relief. If you’re seeking bankruptcy, you’re probably interested in discharging as much debt as possible. While bankruptcy is a practical solution for many, it’s not right for everyone, and while many types of debt (including credit card debt, car loans, and mortgages) can be addressed in bankruptcy court, some debts cannot be restructured or discharged. If you’re considering bankruptcy in the Chicago area, get advice first from an experienced Chicago bankruptcy lawyer. The last thing you want is to go through a bankruptcy and find yourself still deep in financial trouble.

In Illinois, certain debts cannot be discharged in either a Chapter 13 or a Chapter 7 bankruptcy proceeding, including:

– Past due child support, alimony payments, and other family support debts
– Fines or judgments for damages caused by driving under the influence of alcohol or drugs
– Student loan debt
– Fines or penalties imposed by any court, such as traffic fines or restitution ordered in a criminal case
– Income tax debts and all other tax debts
– Any debt unclaimed in the debtor’s bankruptcy petition

In the case of a student loan debt, it is not dischargeable in bankruptcy unless the petitioner can prove that he or she would suffer an undue hardship if forced to repay the loan(s). The undue hardship standard is almost impossible to prove for most people, so student loan debt is very rarely discharged in the bankruptcy process.

Understand that bankruptcy is not the best solution everyone facing a debt crisis. If debt is starting to overwhelm you, and if you are considering bankruptcy in the Chicago area, contact an experienced Chicago bankruptcy lawyer promptly to review your options and discuss the bankruptcy process.