| "A bankruptcy court is without jurisdiction to adjudicate | | | | must continue to repay the debt. If you choose to give |
| controversies over property in the possession of an | | | | up the item, the bankruptcy proceeding will then wipe |
| adverse party without the consent of such party." - In | | | | away that debt. |
| re St. Cloud Tool and Die Co, 533 F.2d 313 | | | | Specialty Debts |
| Bankruptcy can do many things to help a debtor get a | | | | Certain debts cannot be wiped away by a bankruptcy |
| fresh start. An automatic stay is granted to prevent | | | | proceeding because of the nature of the debt. Most of |
| creditors from harassing you. In Chapter 7 bankruptcy, | | | | these special debts are court ordered debts. |
| your debts are forgiven. In Chapter 13 bankruptcy, you | | | | These debts include: |
| are given an opportunity to pay back your debt at a | | | | - Child support payments |
| rate you can afford. You are allowed to keep some | | | | - Alimony payments |
| of your assets to prevent you from becoming | | | | - Criminal fines |
| destitute and a burden to the State. | | | | - Court restitution orders |
| Bankruptcy is not without limitations regarding the | | | | - Taxes |
| protections it can offer. There are circumstances that | | | | - Student loans |
| could lead to you losing exempt property, and there | | | | These are all protected by the law and must be |
| are some debts that cannot be forgiven. When you | | | | repaid. |
| are filing for bankruptcy, watch out for the following | | | | Debt Co-signers |
| limitations. | | | | The bankruptcy wipes away your debt as part of the |
| Secured Debts | | | | process, but it does not do the same for anyone who |
| A secured debt is a debt where the creditor has been | | | | co-signed a loan with you. Even while you are in the |
| granted a property interest in something you own. You | | | | bankruptcy process, co-signed people may still liable |
| can grant almost anything to a creditor as collateral for | | | | for that debt. |
| a loan. If the creditor has perfected their interest in that | | | | Debts Accrued after Bankruptcy has been Filed |
| loan, that collateral belongs to the debtor if you default. | | | | The bankruptcy process wipes away almost all debts |
| Car loans and home mortgages are the most | | | | incurred before you file. It does not wipe away any |
| common forms of secured debt. Bankruptcy cannot | | | | subsequent debts. Once you have filed, your debts are |
| eliminate these debts, but it can force the creditor to | | | | forgiven and you are allowed a fresh start. Any new |
| take payments over time, and it can prevent you from | | | | debts are incurred as part of that fresh start and are |
| having to pay any additional fees. If you wish to | | | | not subject to the bankruptcy. |
| maintain possession of the secured item, then you | | | | |