Filing for bankruptcy and taking your case to NJ bankruptcy court can be a difficult task. Deciding to file for bankruptcy is never easy, but it may be your only option if you are only making the minimum payments on your debts or if you can't create a budget to get yourself out of debt in the next five years. While many of your debts may be discharged under your bankruptcy, there are several debts that cannot be discharged through NJ bankruptcy court. You must continue to pay these debts even after your bankruptcy case has been discharged.
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Alimony & Child Support
Alimony and child support cannot be discharged under a bankruptcy. With most other debts, collection efforts must cease once a creditor is informed that the debtor is filing for bankruptcy. Alimony and child support collections may continue because they are exempt from this rule. The Bankruptcy Abuse Prevention and Consumer Protection Act made support debts the highest priority debts in a bankruptcy case, even above taxes. If you owe child support or alimony, your ex-spouse may file a proof of claim with the court and you will be held responsible for continuing these payments. An attorney can advise you more on alimony and child support and how they are affected by the New Jersey bankruptcy court.
Back Taxes
In the past, debtors often filed Chapter 13 bankruptcies because they owed back taxes. If they made payments on these taxes as a part of a Chapter 13 repayment plan, this is all that was owed once the bankruptcy process was complete. With the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act, this changed. Now back taxes that are the result of failing to file a tax return or filing a late tax return can no longer be discharged. This Act has made many changes to the NJ bankruptcy court and how bankruptcy cases are handled.
Student Loans
Unless you were in an accident and are now completely unable to work, student loans are no longer dischargeable. In the past, private student loans could be discharged under a Chapter 7 bankruptcy. With the Bankruptcy Abuse Prevention and Consumer Protection Act, private loans were given the same standing as government-guaranteed loans and are no longer dischargeable. To have student loans discharged, you must prove that repaying them is an undue hardship on you or your family. The only way to do this would be to prove that you can no longer work due to a disability or severe injury. This is just another way the Bankruptcy Abuse Prevention and Consumer Protection Act has changed the workings of the NJ bankruptcy court.
Going to NJ bankruptcy court can cause a lot of frustration and nervousness. If you are working with an experienced and qualified bankruptcy attorney, you will be able to choose the best bankruptcy solution for your particular needs. While filing for bankruptcy does make life harder, it can also give you a fresh start and help you get back on your feet.
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