Bankruptcy FAQs

No.  Section 525 of the Bankruptcy Code prohibits discriminatory treatment by any governmental or other student loan program on the basis of filing a bankruptcy. In other words, a student loan agency cannot deny your loan application based on the filing, by you or anyone you know, of a bankruptcy. If you would like to read Section 525 for yourself, see section 525

No.  There are many debts which Congress has excluded from discharge.  These are the main types excepted from discharge, although there are others. See more on dischargeability of debt.

 Yes.  Under certain circumstances, judicial liens and “nonpossessory, nonpurchase-money security interests”  may be removed if, based on the value of the asset and the amount of senior liens and encumbrances against it on the date your bankruptcy case is filed, the fixing of the lien causes it to “impair” an exemption to which you are entitled under State (or other applicable) law. Removing Judgment Liens Removing Junior Mortgage Liens

No. While an employer can usually find some reason to fire anyone, they cannot use bankruptcy as a basis for doing so. This is set forth in Section 525 of the Bankruptcy Code.

Not unless they are sold for “reasonably equivalent value”.  Otherwise it can be recovered as a Fraudulent Transfer.

Absolutely not.  I don’t know where people get this idea. You must list all your assets and all your debts in ANY chapter of bankruptcy. You may voluntarily repay anybody you want after your case is concluded (and you are required to repay any debts that are not discharged), but you are still required to list all your creditors. Can you only bankrupt certain debts?

Exemptions are protected allowances for the value in certain assets.  For example, a homestead exemption protects the equity you have in your home, up to a certain value.  All States have different exemption laws which protect the value in certain assets. You need to check with a qualified bankruptcy attorney regarding what exemptions you are entitled to when you file your case. Which state’s laws you use depends on where your domicile was located for the 2 years prior to commencing your bankruptcy case [...]

Many people refer to getting rid of their debts in bankruptcy as “bankrupting” the debt.  They often ask “can I bankrupt this debt?”   That is incorrect terminology.  The legal term for this is “discharge”.  What happens in bankruptcy (assuming you are successful) is that your legal obligation to pay on your debt will be discharged.   Debts are never technically eliminated.   They still exist after a bankruptcy, but you no longer have the legal obligation to pay on the ones that are discharged (or, [...]

Your case is filed in the federal judicial district where you have resided or have your domicile (or for a business, its principal place of business), or principal assets located  for the greater part of the 180 day period prior to the date your case is filed

No.  It’s almost never too late to file bankruptcy.  Assuming that it is a dischargeable debt (meaning one that isn’t incurred through fraud, or a domestic support obligation, or one of the others Congress has excluded from discharge), you can still get rid of the debt even if a creditor has filed a lawsuit against you and gotten a judgment.  You can even get rid of the debt if they have a lien against your property (although the lien will remain against the property unless [...]