CAN I ELIMINATE ALL OF MY DEBT THROUGH BANKRUPTCY?

The simple answer is no. For the most part, credit card debt is generally subject to discharge, but in some instances it may not be. For example, credit that was issued based on fraudulent information by the debtor will not be discharged. Other debt, such as child support, spousal maintenance, and outstanding taxes will likewise not be discharged. In Utah the best way to know about your personal situation is to discuss your case with a Utah bankruptcy attorney.

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IS IT OK TO STOP PAYING ALIMONY AND CHILD SUPPORT DURING BANKRUPTCY?

No. The 2005 changes in the bankruptcy laws require a debtor to remain current on all domestic support obligations such as alimony or spousal maintenance, and child support, throughout the duration of the bankruptcy. If a debtor falls behind on his or her domestic support obligations during bankruptcy, the bankruptcy could be dismissed or converted from a Chapter 13 to a Chapter 7 proceeding. Visit www.dlblaw.com for more information on filing bankruptcy in Utah.

WILL BANKRUPTCY WIPE OUT ALL MY DEBTS?

Yes, with some exceptions. Utah Bankruptcy will not normally wipe out:

(1) money owed for child support or alimony, fines, and some taxes;
(2) debts not listed on your bankruptcy petition;
(3) loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
(4) debts resulting from ‘‘willful and malicious’’ harm;
(5) student loans, except if the court decides that payment would be an undue hardship;
(6) mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).

I recommend that you consult with an experienced Utah Bankruptcy Lawyer to determine what your risk and liabilities may be if you file for bankruptcy protection.

WHAT EFFECT DOES A BANKRUPTCY FILING HAVE ON THE COLLECTION OF CHILD SUPPORT & ALIMONEY?

A Chapter 7 filing should have no effect on such collections.

Although filing bankruptcy stops, or stays, all efforts to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay unless the creditor attempts to collect from the property of the estate. In a Chapter 7 proceeding, property of the estate includes all possessions, money, and interests the debtor owns at the time he or she files. Money earned after the bankruptcy is filed, however, is not property of the estate. Since most child and spousal support is paid out of the debtor’s current income, the bankruptcy should have little impact.

A debtor under Chapter 13 must pay all domestic support obligations that fall due after the petition is filed. Failure to do so could result in dismissal of the case.

Neither a Chapter 7 nor a Chapter 13 discharge affects future child or spousal support obligations. In other words, even at the conclusion of the bankruptcy proceeding, these on-going obligations remain. More information on Utah Bankruptcy can be found here.

IS IT OK TO STOP PAYING ALIMONY AND CHILD SUPPORT DURING BANKRUPTCY?

No. The 2005 changes in the bankruptcy laws require a debtor to remain current on all domestic support obligations such as alimony or spousal maintenance, and child support, throughout the duration of the bankruptcy. If a debtor falls behind on his or her domestic support obligations during bankruptcy, the bankruptcy could be dismissed or converted from a Chapter 13 to a Chapter 7 proceeding. Click here for more information on filing bankruptcy in Utah.