Debts Included In Bankruptcy

Bankruptcy law requires that you list all of your debts on your bankruptcy schedules, even debts that are non dischargeable or secured.

Even debts that you want to repay.

You just don’t get to pick and choose which debts you include.

Debts you want to pay

So, what do you do about debts you want to pay, even though they are dischargeable?

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You can reaffirm any debt you choose after the filing.  Reaffirmation makes the debt legally enforceable after the bankruptcy.

Judges oversee the reaffirmation process and the judge may resist a decision to reaffirm an otherwise dischargeable debt.

Alternatively,  you can voluntarily pay a creditor after you receive a discharge, without becoming legally liable to continue paying.  That is often preferable because if your circumstances change, you are free to stop repaying the debt, since it is legally discharged.

The take away: listing a creditor does not prevent you from paying that creditor after bankruptcy.

Knowingly leaving  a creditor of the bankruptcy papers is perjury.

So listing every creditor is a good thing.

Excluding a credit card

Often, debtors hope to retain the use of a credit card after bankruptcy.

Omitting a credit card company from your schedules does not assure continued access to the card.  While you aren’t expected to list a card that has no balance when you file, that doesn’t assure that the issuer won’t cancel the card anyway.

Most major credit card issuers use a national data base to determine who has filed bankruptcy, independently of the court’s notice to them of bankruptcy filings.

Some routinely cancel cards of everyone who has filed bankruptcy, whether or  or not a balance is owed.

If you choose to payoff a credit card before filing, make sure to list the payment on the Statement of Financial Affairs.

A secured credit card may be the answer for access to some revolving credit after the bankruptcy is over.

What do I have to do to file?

Cars in bankruptcy

Houses in bankruptcy

Credit after bankruptcy

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About the Author
 
 
Northern California bankruptcy lawyer Cathy is a 30+ year veteran of bankruptcy practice in the Silicon Valley. She is known for energetic representation of clients and her command of bankruptcy law.