Welcome back. As we said in the first post, the purpose of this two-part series is to give you a clear understanding of the ways in which bankruptcy may not be able to help you. Instead of setting unrealistic expectations, we want you to know what to expect when you ask us to help you file for bankruptcy relief.
In the first post, we discussed how it is often not possible to eliminate certain kinds of “secured” debt through bankruptcy, alone, such as home mortgage debt, auto loan debt or property tax debt. However, as we discussed, there are still ways to keep your property and reduce your secured debt, and an experienced bankruptcy lawyer can go over these options with you.
We also discussed how there are other debts that receive special treatment under the law and usually are not dischargeable in bankruptcy, including child support, most student loans, alimony, court restitution orders and criminal fines.
In this post, we are going to discuss a couple of additional things bankruptcy typically cannot do.
Generally speaking, it is not possible to protect cosigners on your debts through bankruptcy. Even if you no longer have the legal obligation to pay back the loan, it is possible that the creditor could still go after whoever co-signed the loan with you for payment. For that reason, you will want to discuss your options carefully with an attorney if you had a co-signer on any of your loans.
Finally, it is not possible to discharge debts that you acquire after filing for bankruptcy. On the date you file for bankruptcy, there is a line drawn in the sand and any debts you take on after that date are not part of the process. That is another reason why it is important to work with a bankruptcy lawyer who can make sure you file at exactly the right time.
Hopefully, you now understand more clearly what bankruptcy usually cannot do. Remember to ask your bankruptcy lawyer if you ever have any questions about the bankruptcy process along the way.