Student Loans and Bankruptcy
In Bankruptcy law, there are many myths about what you can and cannot discharge when filing for bankruptcy. One of the biggest myths in bankruptcy today is that when you file for bankruptcy and attempt to have your debt discharged, student loans are impossible to discharge. While student loans are typically exempted from discharge, it is possible to have the Bankruptcy Court make a determination that the student loans pose an undue hardship.
Chapter 7 bankruptcy is meant for people who are in an especially tough spot financially. To qualify for Chapter 7 bankruptcy, your disposable income must be low enough to pass the means test.
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When faced with debt and the inability to pay back all creditors, American citizens or businesses are able to file for bankruptcy based on their financial situation. Chapter 7 bankruptcy is, in general, an overall liquidation of assets, while Chapter 11 bankruptcy is a basic reorganization or rehabilitation bankruptcy. Chapter 7 bankruptcies often result in a Chapter 7 Trustee attempting to sell off a Debtor’s assets to pay off creditors, while Chapter 11 leaves an individual or corporation in control of their assets and allows them to negotiate with creditors to alter or cure the loan payment terms, in an attempt to have debts paid back without forcing a liquidation of assets.
Filing Bankruptcy to Stop the IRS
If you have past due federal taxes and the IRS has begun the collection process, filing for bankruptcy may be a viable option. If you decide to pursue bankruptcy to settle your tax debt, several steps must first be taken.
- You you should file all required tax returns for tax periods ending within four years of your bankruptcy filing.
- While your bankruptcy is underway:
- You must continue to file all necessary returns.
- You need to pay all current taxes as they are due.
Not all tax debts are dischargeable through bankruptcy. Older income tax obligations with a return due within the past three years are more likely to be discharged. A Chapter 7 bankruptcy wipes out your dischargeable tax debts, with the exception of priority taxes. If you owe priority taxes Chapter 7 bankruptcy will only provide you with temporary relief from IRS collectors while the automatic stay is in effect.
Bankruptcy Filing Fees Increased June 1st, 2014
Filing for bankruptcy is an important step many people take to protect themselves from creditors, while also giving them the opportunity to retake control of their financial state. As of June 1st, 2014 many bankruptcy filing fees have changed and increased. The list below was compiled to help keep those curious about filing for bankruptcy up to date.
|Petition Fees Increased
||New Costs Effective 6/01/2014
|Chapter 7 Bankruptcy Filing Fees
|Chapter 9 Bankruptcy Filing Fees
|Chapter 11 Bankruptcy Filing Fees
|Chapter 11, Railroad Filing Fees
|Chapter 12 Bankruptcy Filing Fees
|Chapter 13 Bankruptcy Filing Fees
|Chapter 15 Bankruptcy Filing Fees
As petition fees have increased, so have the conversion fees. These conversion fees are applied when an individual or corporation has decided to convert from one type of bankruptcy to another. To note, not all conversion fees have increased.