If you’re ever in a situation where you have to file for bankruptcy, you might be surprised to know that not all your debts get wiped clean. You’ll still have to pay some of them off, depending on what kind of bankruptcy you’ve filed for. Here are sixteen of those debts that you can’t discharge and two things you can do about them.
The IRS Never Forgets
If you’ve got any tax debts from the last three years, chances are that they’ll stick with you through bankruptcy. The IRS sets the rules here, and they’re usually not that forgiving about any recent dues. Essentially, you’ll have to find another way to handle these debts as you deal with your bankruptcy.
Educational Costs
You can’t let go of your student loans that easily unless you can prove “undue hardship,” which is as difficult as it sounds. You’d have to prove that paying your loans back to the federal government would prevent you from living a normal life. Most people can’t prove this, and they’re stuck with these loans, sometimes forever.
Fines and Penalties
Any fines or penalties you might have to any government agencies don’t get wiped out either. Usually, they’re related to some sort of rule-breaking, which is why these debts tend to stick around. No matter your situation, the government expects you to pay them up because it’s a way for you to take accountability for your actions.
Court Fines and Restitution
Similarly, bankruptcy won’t help you dodge debts from fines or restitutions related to a crime. They’re there for a reason, and the government will force you to pay them, no matter how broke you might be. This way, justice is served, and everyone fully understands the consequences of breaking the law.
Personal Injury Debts
Going bankrupt isn’t a get-out-of-jail-free card, and that means you still have to pay off any personal injury debts. If these charges are related to something like a DUI conviction, then there’s no way they’ll get wiped off. These debts are meant to be difficult so that you’re unlikely to offend again.
Condo Fees
Living in a condo or a cooperative usually comes with certain fees for upkeep and management, even if you declare bankruptcy. You’ll have to pay any fees before your filing date because that’s part of being in your community. Continuing to pay them helps to keep your community well-provided and accessible to everyone.
Homeowners Association Fees
Over 53% of homes in America are part of a homeowners association, and if that’s you, make sure you think about those fees. If you racked up a homeowner association fee before filing for bankruptcy, you’ll still have to pay it afterward. Like with condos, these payments help to fund things in the community like the pool or security, so it’s important to pay.
Helping the Family
Your bankruptcy also won’t touch any child support or alimony payments you need to make. These are meant to help you take care of your family, the law prioritizes these payments above most others. After all, your kids and ex-partners still need someone to take care of them, even if you’re struggling to do it for yourself.
Family Law Attorney Fees
Similarly, you’ll also need to pay off any legal bills from a family court battle, such as for custody and divorce. In most other cases, attorney fees are dischargeable, but not family court-related ones. They’re linked directly to you, and filing for bankruptcy doesn’t make them suddenly disappear.
Payback Times
Don’t think you can just erase that retirement plan loan by declaring bankruptcy. Any loans you take from your future self, aka your retirement plan, won’t get dismissed, so you have to pay them back if you want to keep your retirement on track. Once you pay them off, you’ll have a better idea of where you stand financially.
No Cheating the System
Similarly, if you’ve tried to be sneaky and put too much in your retirement accounts, these excess contributions won’t be discharged if they’re fraudulent. This is meant to keep people honest and make sure everyone’s playing by the rules. You’ve got to do as the law says and make sure any retirement contributions are by the book.
Caught Red-Handed
And that goes for any other debts, too. If a court finds out you received money through fraud, you’ll still have to pay off those debts after bankruptcy. They want to keep the financial systems running properly and fairly so that nobody gets exploited. Filing for bankruptcy won’t stop this from happening.
Unlisted Debts
Make sure you include every single debt on your bankruptcy file because any debt that you don’t list will stay active. You can’t pull the “I forgot” excuse, either, so make sure you double and triple-check that list of debts. If you don’t, you might be stuck paying a high-interest debt that you could’ve easily gotten rid of.
Last-Minute Luxury
Some people think they can get away with things by buying luxury items and then filing for bankruptcy so they don’t have to pay them off. But the law doesn’t work that way. If you’ve bought any luxury items worth $800 or more on credit within 90 days before the filing date, you’ll have to pay them off. Bankruptcy is meant to be responsible and fair, not an easy way out.
Recent Cash Advances
Likewise, taking out large cash advances just before filing doesn’t work for you either. These debts are explicitly excluded to stop people from abusing the bankruptcy system, as well. The limit is $1,100 within 70 days of you filing for bankruptcy, although there is some leeway. Depending on what you used the cash for, you may be able to discharge it.
Securities Law Violation
Any debts you receive from violating security laws are non-dischargeable in bankruptcy, too. This is meant to protect investors and keep people feeling good about the stock market, which depends on people playing by the rules. If people can just get these fees wiped off after bankruptcy, then the system would collapse.
Payment Plans
So what can you do to pay these fees off? A payment plan is your best option because it’ll help to make each debt a little smaller at a time. Most creditors are open to working out a plan that’ll fit your budget so you can keep paying without being overwhelmed. Regular small payments will help your credit in the long run.
Finding the Middle Ground
In some cases, creditors will settle for less than what you owe, especially if it means they’ll get paid faster. Speak to a professional to help you figure out how to tip the scales back into your favor so that your finances become a little more manageable. Just remember that it’s not a guarantee.
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