What happens to your debt after you file bankruptcy?

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  1. AlyandDavy:

    I know that it doesn’t get passed down to your family. I think they just book it as a loss.

    I need to file for bankruptcy =(

    January 18th, 2011 at 12:18 pm

  2. MeliseR:

    Depends on if you file chapter 13 or chapter 7. Chapter 7, the cour discharges the debts you owe. in chapter 13, liquidates your assets and pays back your debt.

    January 18th, 2011 at 12:18 pm

  3. Steve D:

    Upon filing for bankruptcy, all your personal debts are frozen. What happens next depends on what type of bankruptcy you file. Chapter 7 bankruptcy eliminates almost all debts (debts to the government and education loans are not discharged and still must be paid). Chapter 13 bankruptcy requires you to set up a re-payment schedule under which you can take 3 to 5 years to repay your creditors.

    There are certain advantages to Chapter 13 vs. Chapter 7, some of which depend on your state of residence. especially if your have a house you would like to make sure you keep, see a good bankruptcy lawyer and have him/her explain the ramifications of both types of bankruptcy.

    January 18th, 2011 at 12:18 pm

  4. Ann K:

    When you file for bankruptcy, you have to make a list of all your creditors that you want included. Some states will even let you include taxes that are overdue. once you file the paper work, those companies cannot contact you or ask for payment. All your debts will be discharged, and those companies have to accept the loss. Nothing gets consolidated or passed on to your family.

    January 18th, 2011 at 12:18 pm

  5. Doctor Deth:

    depends – chap 13 Bank – you have to pay back a portion of it over 5 yrs, the rest is forgiven – chap 7 – all is forgiven – credit cards and loan debt now has to be done thru Chap 13 Bankruptcy – no more free rides there – and then your credit is ruined for years afterward – new credit cards (once they actually approve you will have int rates starting at 20%, car loans will be high rates for several years, I was able to get a zero down closing costs paid mortgage in 2006 at a decent rate – 5 yrs after bankruptcy discharged – you can;t get that kind of mortgage at all anymore no matter what your credit score is like

    January 18th, 2011 at 12:18 pm

  6. Bahgel the Wizard of Makkenhill:

    Most of the time most of it just contributes to inflation because you put the banks and / or government further in debt. everyone else just pays more money for everything to save your tuckus. Its a loss for us all. You pass it on to everyone else on Earth. It goes away but leaves you blacklisted in the credit world for life!

    January 18th, 2011 at 12:18 pm

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