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It is the beginning of the new year and I’ll bet you thought this blog was going to be about New Years’ resolutions. Debt Resolution is different. It means forgiving debt.

Here are some questions:

Does bankruptcy relieve me of all my debt?

The policy of bankruptcy law is that the honest debtor who is in debt beyond its ability to repay its debts should receive a fresh start.

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.

Secured debts generally must be paid if the debtor intends to retain the collateral securing the debt. If they are not paid, the creditor will usually take the necessary legal steps to recover the property.

Will bankruptcy stop a wage garnishment?


Will bankruptcy stop a foreclosure?

Temporarily, yes. However, the lender is entitled to seek 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 reach an agreement with the lender and resume making payments. Chapter 13 can be helpful in accomplishing this if the creditor is not willing to voluntarily work out an agreement.

Will bankruptcy stop an eviction?

It may delay it, but the owner is entitled to possession of the property and will be able to resume eviction proceedings with court approval or after the discharge. Filing a Chapter 7 solely to avoid an eviction might be considered an abuse of the bankruptcy law. 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 collection actions are stopped by bankruptcy.

Will a bankruptcy remove a lien?

Certain liens may be removed, but this requires a motion to be filed with the court. The procedures are complex and are best done with an attorney.

Is spousal support dischargeable?

Spousal support and child support payments generally are not dischargeable. Certain other dissolution related obligations, such as payments to others, hold harmless provisions and property settlement obligations, are not dischargeable. Back to contents

Can I discharge student loans?

Generally, student loans are not discharged in bankruptcy. Although there is 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.”

The facts of the particular case will determine discharge ability. If a student loan falls into the exception, discharge of the loan is not automatic. The debtor should file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged. Back to contents

If I co-signed for a debt, 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 protects certain co-signers during the bankruptcy proceeding. Back to contents

What if I do not list a creditor on the bankruptcy papers?

You are required to list all creditors. If you intentionally omit a creditor from your schedules, it is perjury and you may lose your bankruptcy discharge. However, if a creditor is not known to exist at the time the schedules are filed, you may amend your schedules at any time the case is open to add an additional creditor.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida. For more information, go to our web site or call 727-335-7151.