' Obligatory Debt and Bankruptcy - Law Offices of Robert M. Geller
CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

What is an Obligatory Debt and How Is It Affected by Bankruptcy?

Obligatory Debt And Bankruptcy Tampa, Pasco, St Petersburg Florida.Obligatory Debts and Bankruptcy

There are all different kinds of debts and all of them are affected differently when you file for bankruptcy. A dischargeable or non-obligatory debt can be eliminated in bankruptcy, which means you’ll no longer be legally responsible for paying it and the creditor will be barred from attempting to collect on it.

A non-dischargeable or obligatory debt, on the other hand, is one that is not eliminated in bankruptcy. If you have an obligatory debt it will not be directly affected by bankruptcy. Bankruptcy could free up money to help you pay the obligatory debt, but you should not expect it to be reduced or eliminated when you file. And if the bulk of your debt load is obligatory, bankruptcy might do very little to help ease your financial burden.

It’s possible for a person filing for Chapter 7 bankruptcy – the type designed to offer debt forgiveness and create for the filer a blank financial slate – to walk away from the experience with just as much debt as they had when they entered bankruptcy if the majority of their debts were obligatory.

What Types of Debts are Obligatory?

Many people assume the bulk of their debts would be dischargeable if they filed for bankruptcy, but the truth is there are quite a few different types of debts that are obligatory. Some of the most ordinary debts held by most people are not eliminated by bankruptcy. These include:

  • Student loans
  • Tax debt at the federal, state, and local levels
  • Child or spousal support
  • Any debt tied to a court order
  • Fraudulent debt

For a list of debts that are typically dischargeable, check out this information provided by the US bankruptcy court.

What Can You Do If You’re Struggling with Obligatory Debt?

So what can you do if the bulk of your debt load is obligatory and bankruptcy won’t offer the relief you were hoping to receive?

Start by evaluating your specific debts. Even though the list of debts above are obligatory, each one is still different and should be handled differently if you are struggling financially.

For instance, student loan debt might be negotiable with the lender. There might be programs for which you are eligible that can help alleviate some of the burden of student loans. Sometimes the job you take affects your student loan and if you currently have no job at all, you might be able to defer payments that are due until a later date.

If you’re facing a tax debt, it might be possible to negotiate a more affordable settlement with the IRS. Sometimes a payment plan might be an option so you’ll be able to spread out the amount you owe over time without penalties instead of paying it in one lump sum.

Negotiating payment plans and other arrangements can be challenging. Remember, even if a debt collector is willing to work with you, they still have only one primary goal: to get the money they are owed. It can help to have a financial professional negotiate on your behalf to ensure that any arrangement you enter into is really in your best interest.

A final option you might have if you are dealing with obligatory debts is to file for Chapter 13 instead of Chapter 7. Chapter 13 does not offer automatic debt forgiveness and instead puts you on a court-overseen payment plan that lasts for several years. At the end of that time, some of your debts might be forgiven, but even if an obligatory debt is not forgiven you might be able to include it in the payment plan, making it easier to afford everything you owe.

If you have questions about obligatory debts or you’re trying to find a solution for dealing with financial challenges, we can help. Contact the Law Office of Robert M. Geller at (813) 254-5696 to schedule a free bankruptcy lawyer consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

Can Bankruptcy Stop Foreclosure?

Many people face the distressing prospect of foreclosure on their homes. If you find yourself in this situation, it's crucial...
Read More

How Much Does It Cost to File Bankruptcy in Florida?

Financial challenges can be overwhelming. For many individuals, bankruptcy becomes a viable option for a fresh start. Many clients are...
Read More

How to Get Out of Debt: Exploring Your Options

Debt is a pervasive issue that affects millions of people worldwide. It is hard to escape debt, especially if you...
Read More

How Will Bankruptcy Affect My Child Support Obligations?

Parenting can be tough, and it's even harder when you're facing financial difficulties. Struggling with debt and bankruptcy can cause...
Read More

Student Loans: Is Discharge in Bankruptcy Possible?

Student loans have become a necessary evil for most students to pursue higher education. The cost of education has increased...
Read More

Should I File Bankruptcy for Credit Card Debt?

Credit card debt can be a huge burden on our financial lives. The pressure to make payments, maintain balances, and...
Read More

Can Bankruptcy Stop Wage Garnishment?

Wage garnishment is a legal process in which a creditor can collect a debt by receiving a court order that...
Read More

Bankruptcy Guide: How It Works, Types, and Consequences

Dealing with money problems can be a stressful and overwhelming experience. Sometimes, debt can become unmanageable, and it may feel...
Read More

What to Say to Someone Going through Financial Problems

Financial problems can be one of the most stressful experiences a person can go through. If you know someone who...
Read More

How Do People Get Into Debt?

How do people get into debt? Are you struggling with debt? Do you feel like the weight of your financial...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions