Bankruptcy And All Debts

11 Sep Bankruptcy And All Debts

When you file bankruptcy, regardless of which chapter, you must list all of your debts and all of your assets. Bankruptcy law requires you to list both and you are signing the petition under penalty of perjury that you have listed everything.

If you don’t list all of your assets, lots of bad things can happen. Please see the excellent comments by my colleagues, Craig Andreson and David Leibowitz.

All of your debts must also be listed: even if you don’t want to file bankruptcy on a specific obligation or credit card. But the debt has to be listed. Once that is done, however, there is nothing in the law that says you can’t pay that debt after the bankruptcy is over. You just don’t have to pay it.

So, go ahead and list everything. And then, if you want to pay your parents back or the nice doctor, do so.

There are actually two ways to pay back someone after you have filed bankruptcy. You can do so voluntarily; simply paying what you can afford when you can. Or, you can enter into an agreement to make regular payments. These are called “reaffirmation agreements” and once signed and filed with the bankruptcy court; obligate you legally to making the payments. They, effectively, cancel the discharge for that debt.

As a bankruptcy attorney, I always tell my clients not to sign a reaffirmation agreement. The debt is discharged; don’t reinstate it. Of course, circumstances vary and there may be a perfectly good reason to agree to repay the debt (for a car, for example). Of course, like any agreement, it’s always best to check with your Bankruptcy attorney before you sign such an agreement.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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