If you face insurmountable debt and have concluded that your only way forward is through a personal bankruptcy filing, you may have questions about how the process works. Do you have to include all your debts in the bankruptcy filing, or can you leave specific ones out? What if you have an obligation to a friend or family member—do you have to disclose that debt, too? Can you leave your house or car out of the bankruptcy? Can you hang on to one credit card, to use in case of emergency?
Under the federal bankruptcy laws, you cannot include certain debts and exclude others in a bankruptcy filing. When you file for protection, you must disclose everything you own and all debts that you owe. There are certain obligations that cannot be discharged in a bankruptcy proceeding, such as child support or spousal support arrearages, certain tax debts, and criminal restitution. All debts must listed in your bankruptcy petition including the ones that will not be discharged.
It is important to understand, though, that there is nothing in the bankruptcy laws that prohibit you from voluntarily repaying all or some of a debt that has been discharged in bankruptcy. Though the bankruptcy removes any legal obligation to repay the debt, you are always free to make payments to or satisfy prior obligations after your bankruptcy is finalized.
If you are concerned about your home or a vehicle, it is important to remember that there are state and federal exemptions of property that go into a bankruptcy estate. These exemptions protect your property from your creditors. The dollar amounts vary from state to state, so it is best to consult with your attorney to determine what property may be exempt, and whether you can keep certain property.
Contact John Hargrave and Associates
We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-759-6022 (toll free at 866-662-3191).