Archive for the ‘debt’ Category
When you file for bankruptcy, you will be asked to provide a list of your creditors, and any accounts that are to be included in bankruptcy. This list is intended to be exhaustive. The court will take your list, and use it to notify your creditors that you have filed for bankruptcy protection, and let them know that they can no longer pursue collections against you.
When I filed for bankruptcy, I kept a single credit card account, my Kohl’s card, and I also kept a loan for my truck. Other than that, I wanted everything included. I kept those two accounts because I wanted to be able to buy clothes at Kohl’s, and I needed a vehicle and couldn’t afford a used car loan. I listed everything else I knew about, and my lawyer pulled information from my credit report for inclusion in the bankruptcy. I thought everything was included.
However, after my bankruptcy was over and discharged, I found a couple of accounts that had been missed. They hadn’t reported to my credit reports until later. One was for my satellite TV, and the other a doctors’ bill that went to collection, that wasn’t even mine. Since both accounts were opened before the bankruptcy, they were included automatically.
Why? The US 6th Circuit Court of Appeals ruled that all accounts that were open at the time of a bankruptcy are included, regardless of whether they were included in the filing or not. While that hasn’t gone to the Supreme Court, it has held up when tested. This means you don’t have to include a debt your self for it to be included in your bankruptcy. However, deliberately omitting a debt from your creditors list is illegal.
But what about the things you want to keep? Typically, you sign a re-affirmation for a debt you want to keep, and continue to make payments on it. This will exclude it from your bankruptcy, and will allow the debt to be kept by the consumer. Your creditor has the right to refuse to re-affirm the debt, but if they do that they lose their money, so they will usually work with you.
The answer to the question is that you can keep some of your debt in a bankruptcy, but any account you keep needs to be re-affirmed. Otherwise, they will be considered as included in the bankruptcy.
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