Bankruptcy and Your Debts

A collection of frequently asked questions about how your debts are impacted by bankruptcy.

What is the significance of 910 days for car loans?

910 days (about two and a half years) is an important threshold in the life of a car loan for a prospective filer of chapter 13 bankruptcy.

Like other secured loans, a car loan can become underwater or undersecured, where the value of the car is less than the amount owed on the loan. This most often happens when cars are purchased new and depreciate faster than the loan balance is repaid. It also occurs when loans have high interest rates or when the car loses value unusually fast, as is the case of high mileage or an unpopular make and model.

How much do creditors have to be repaid in Chapter 13?

The requirements for repaying creditors in a chapter 13 are somewhat detailed. The following is a general summary that notes the basic rules without going into finer details or exceptions.

What kinds of debts are non-dischargeable in bankruptcy?

In bankruptcy, a bankruptcy discharge ends a debtor's personal liability on all debts except those otherwise made non-dischargeable. This post contains a list of significant categories of non-dischargeable debt.

Are all judgments the same?

No. There is significant variety in the nature of judgments and how they are affected by a bankruptcy case. Notable questions are whether a judgment lien exists against the debtor's property and whether the judgment concerns an underlying not-dischargeable debt.

How is alimony or child support treated in bankruptcy?

The bankruptcy code refers to child support and alimony as domestic support obligations. Bankruptcy does not eliminate domestic support obligations, and ex-spouses and children receive considerable protection within the bankruptcy system.

Can bankruptcy get rid of student loans?

In short, no. Student loans, both federally backed loans such as perkins, stafford, and PLUS loans and private student loans, are presumptively non-dischargable. A non-dischargable debt is not affected by the bankruptcy discharge, and the debtor remains liable on the debt after bankruptcy.

Why does joint debt matter?

One item of information we need about each of your debts is whether anyone else signed for or is otherwise responsible for a debt. This information needs to be disclosed in the bankruptcy petition. As a matter of bankruptcy planning, a determination must be made about what is likely to happen to the co-obligor once you file, and whether such is a cause for concern to the debtor.

Can I not include some debts in a bankruptcy?

Generally no. Bankruptcy is an all-inclusive process, requiring full disclosure of all debts and assets. However, inclusion of a debt in your bankruptcy filing does not itself determine the final treatment of that debt.


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