Any Maryland resident can fall on hard times financially. If you have reached the point where you can no longer pay your debts and other expenses, you are likely considering your options to have some, if not all, of your debts eliminated. One option you may have considered is filing for Chapter 7 bankruptcy. Known as a liquidation bankruptcy, Chapter 7 allows you to discharge some of your debt so that you can begin to rebuild your finances. However, you need to understand what debt you cannot eliminate through this type of bankruptcy.
Alimony and child support: If you are divorced and have been ordered to pay alimony and/or child support, those payments cannot be discharged through bankruptcy. If you cannot meet your obligations, you can seek to have the court order modified with regards to your current financial situation, which will hopefully result in a reduction of the payments for which you are responsible.
Student loans: If you owe a significant amount in student loans, making those payments can be tough. While student loans are typically not discharged in bankruptcy, you can find relief by proving that the payments will cause you undue hardship. To find out more about how you can qualify for an undue hardship exemption, you will need to speak with a bankruptcy attorney.
Fines, penalties and judgements: If you have been ordered by the court to pay for court fees or penalties associated with criminal activity, you will not be able to discharge those debts under bankruptcy protection. Likewise, you cannot discharge debt you owe because of judgements against you as a result of civil claims. If you were ordered to pay restitution because of a personal injury or wrongful death claim made against you because of your negligent or criminal actions, such as drunk driving, you will not be able to discharge this obligation.
Tax debt: If you owe a considerable amount in personal income taxes over the past three years, you cannot discharge that debt through bankruptcy. This applies to other types of tax debt as well.
Debts you fail to list in your filing: Even if the debt is eligible to be discharged under bankruptcy protection, failing to list that debt will likely mean that you will still be responsible for it after the court approves your filing. Make sure you list all of your debts when you file for bankruptcy so that you can have all eligible debts discharged.
Aside from the debts listed above, other debts may also be non-dischargeable. Under Maryland bankruptcy law, you may still be responsible for debts you incurred through illegal activities, such as fraud or embezzlement, as well as substantial debts you incurred just before your bankruptcy. In order to determine all of your options regarding which debts you can discharge through Chapter 7 bankruptcy, you need to consult with an experienced bankruptcy attorney.