Bankruptcy and Your Debts

No, a bank doesn't have discretion on whether or not a loan is involved in a chapter 13 bankruptcy.

Basically, the debtor wants to file a claim on behalf of a creditor when the debtor wants that creditor to be paid.

Student loans receive special treatment, and are generally not discharged (wiped-out) by a bankruptcy case. But student loans are not the only sort of educational debt. In some cases, the debt is an unpaid tuition bill or other charges owed to a school, college, or university.

What happens to my mortgage in chapter 7 bankruptcy?

Almost all residential mortgages require that the home be insured against causality, with the lender being a beneficiary. Such a requirement is not surprising. A residential mortgage involves lending a sizable amount of money, with the value of the home as collateral providing assurance to the lender of being repaid. Fire and other disaster risks the destruction of the collateral, and a bank would desire insurance for many of the same reasons an owner of a home free-and-clear would.

Bankruptcy is designed to provide relief from debts. However, all debts are treated the same. While what might happen to any given debt can become a very fact-particular inquiry, there's a few categorizations that are very basic to understanding the bankruptcy process.

North Carolina residents are fortunate to not have to routinely deal with wage garnishment. For most ordinary debts, such as credit cards, vehicle repossession deficiency balances, and private medical bills, North Carolina law does not permit wage garnishment as a means to collect the debt. However, North Carolinians sometimes find themselves having their wages garnished on order of another state's courts.

A proof of claim is the basic document that when filed asserts a creditor's right to be paid in bankruptcy. Subject to allowance and disallowance, the filed proof of claims determine who gets the money paid out by a trustee in bankruptcy. The claim form includes several basic facts about the debt and creditor.

Generally, no. If a person desires to keep a car, generally it will be necessary to keep making the payments. Self-help repossession can occur very quickly, and very soon after a default (missed payment) on the loan contract.

Credit card lenders and their debt collectors obtain a large number of judgments each year. By obtaining a credit card judgment, the lender gains the ability to use judicial process to sell the borrower's property or seize money out of bank accounts. The lender with a judgment can attempt to collect for 10 years or more. While credit card judgments themselves are seldom an impediment to bankruptcy, judgments that have become judgment liens required special considerations.