Resolving Debts in Bankruptcy
Assets and Exemptions
After You File
Bankruptcy and Credit Reports
Questions for Creditors

Is it true I can cancel all debts by filing bankruptcy?
Will bankruptcy stop a wage attachment?
Will bankruptcy stop a foreclosure proceeding?
Will bankruptcy stop an eviction, or unlawful detainer, action?
Will bankruptcy stop a judgment?
Will a bankruptcy remove a lien?
Is Alimony Dischargeable?
Can I discharge student loans?
If I am a co-signer for a debt, how does bankruptcy affect the obligation?
What if I fail to list a creditor on the bankruptcy papers?

Is it true I can cancel all debts by filing bankruptcy?
The underlying policy of bankruptcy law is that the honest debtor who is in debt beyond its ability to repay the debt should receive a fresh start through the discharge of debts.

However, some debts must still be paid. Generally speaking, the following debts will not be discharged: taxes; spousal and child support; debts arising out of willful misconduct and or malicious misconduct by the debtor; liability for injury or death from driving while intoxicated; nondischargeable debts from a prior bankruptcy; student loans; criminal fines and penalties and forfeitures. 11 U.S.C. sec. 523 describes exactly which debts can not be discharged.

Secured debts may be discharged. In most instances the creditor will take the necessary legal steps to recover the property unless you can reach an agreement for repaying the debt.

Will bankruptcy stop a wage attachment?
Yes.

Will bankruptcy stop a foreclosure proceeding?
Temporarily, yes. However, the lender is entitled to apply to the court for relief from the automatic stay to allow it to continue foreclosure proceedings. Usually, to keep a home that is in foreclosure, the debtor will have to make a deal with the lender or file a Chapter 13 bankruptcy petition.

Will bankruptcy stop an eviction, or unlawful detainer, action?
Sometimes it will, but it is usually not a good idea. The owner is entitled to possession of his property and at best the debtor will only gain a short delay. Filing a Chapter 7 solely to avoid an eviction might be considered an abuse of Chapter 7. If the Bankruptcy Court finds that this is true, then the court can immediately dismiss the bankruptcy and impose other legal and monetary sanctions on you.

Will bankruptcy stop a judgment?
Yes. Most civil judgments are stopped by bankruptcy.

Will a bankruptcy remove a lien?
Under some circumstances, once the bankruptcy proceedings have started, a special motion can be filed to remove certain liens. The procedures are complex and require an attorney's assistance. There is an additional fee for this service.

Is Alimony Dischargeable?
Alimony, maintenance and child support payments generally are not dischargeable. A few technical exceptions exist. The law provides that certain other divorce related obligations, such as payments to others, hold harmless provisions and property settlement obligations are not dischargeable if the debtor has the ability to pay them and the detriment to the spouse outweighs the benefit of the discharge to the debtor. In order to take advantage of this provision, the spouse must obtain an order from the bankruptcy court declaring the debt non-dischargeable.

Can I discharge student loans?
Generally, student loans are not discharged in bankruptcy. The law does provide for an exception to this general rule.

The student loan may be discharged if paying the loan will "impose an undue hardship on the debtor and the debtor's dependents."

Whether this exception applies depends on the facts of the particular case and may also depend on local court decisions. You will likely have to file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged.

If I am a co-signer for a debt, how does bankruptcy affect the obligation?
If the debt is a dischargeable debt then you will not have to pay it. Your co-signer will become primarily responsible for the debt. If you file a chapter 13 petition, a special automatic stay provided by the law protects certain co-signers during the bankruptcy proceeding.

What if I fail to list a creditor on the bankruptcy papers?
If you intentionally omit a creditor from your schedules, you have committed perjury. However, sometimes a creditor is not known to exist at the time the schedules are filed. Generally, you may amend your schedules at any time during the bankruptcy proceeding to add an additional creditor.

If you accidentally omit a creditor, and the creditor does not otherwise learn about your bankruptcy proceeding in time to participate in the proceeding, the debt owed to that creditor might not be discharged.
.