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South Carolina bankruptcy and debt ineligible for discharge

South Carolinians who are filing for a Chapter 13 bankruptcy may not be aware that some debts are not eligible for discharge during the bankruptcy process. Generally, child support, student loans, legal fines and other long-term debt such as mortgages are not eliminated during bankruptcy. This means that collections on these types of debt may be continued, particularly in the case of child support.

Whether child support and alimony debt is discharged often depends on whether the individual filed for a Chapter 7 or Chapter 13 bankruptcy. In most cases, a Chapter 7 does not allow such debt to be discharged while a Chapter 13 may result in an at least temporary halt to collections. A stay on collections for alimony or child support only applies to obligations prior to the bankruptcy and does not prevent collections on ongoing payments.

Student loans are generally not eligible for discharge under Chapter 13 bankruptcy unless the court determines that repaying the loan would result in undue hardship. Undue hardship discharge is based upon evidence that the debtor is unable to make payments, and it is a status that must be applied for before any other debt is discharged. The general guidelines for determining whether a student loan is eligible for discharge are an inability to repay the loan while maintaining a minimum standard of living, financial hardship that will continue for a large portion of the loan repayment period and a good-faith attempt to repay the loan in the past.

Chapter 13 bankruptcy can be an effective way to reduce debt and stop collections attempts or even home foreclosure. Alimony, child support and student loans are generally more difficult to discharge in bankruptcy than other forms of debt, but it is possible. A bankruptcy lawyer may be able to help individuals filing for bankruptcy negotiate manageable payments or even discharge.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
Suite 201
Columbia, SC 29201

Phone: 803-764-1558
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925-D Wappoo Road
Charleston, SC 29407

Phone: 843-509-0039
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