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What bankruptcy cannot touch

A New Jersey bankruptcy can be the light at the end of a long dark tunnel. It often provides hardworking people with a new start when financial issues, often outside of their control, have taken over their daily lives.

But, to be clear, while bankruptcy can do wonders, there are areas of debt that are off limits. Despite the misconceptions of some when it comes to bankruptcy, a person will not be able to discharge the following debts, in most instances.

Secured debt

According to Bankrate.com, secured debt has strings attached. This would include items like a motor vehicle. A person filing bankruptcy will either have to continue to pay that debt in order to keep the secured vehicle, or the filer can give up the car to wipe out the debt. The car is the security for the debt, so failure to pay the debt means the lender can take the car, in addition to sue for the payments. Bankruptcy will eliminate the lender's ability to sue for the payments, but will not eliminate its right to take the security.

School loans

A big one, and very common in our current educated society, is school loans. This can be unfortunate, particularly since often school loans can be huge and may even exceed one's mortgage. A person with school loans of magnitude will want to look at other options to manage those loans, such as income-based repayment options that are currently available.

Restitution

Often, court ordered restitution is not dischargeable. This would include a court order to pay back the damages another person suffered as a result of a crime the filing party committed. The same is typically true of damages owed due to driving while intoxicated.

Child support and alimony

Child support is also nondischargeable in bankruptcy. The same holds true for alimony. Also, while normally a person may be able to discharge credit card debt, if he or she has a divorce decree that includes a promise to pay off that joint credit card balance, it will most likely stick.

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