- One of the main reasons to file bankruptcy is to obtain a "discharge."
- A discharge is a court order stating that you no longer have to pay most of your debts.
- The discharge will only apply to debts incurred prior to the date the petition is filed.
- Examples of debts that cannot be discharged in bankruptcy are:
- Most taxes
- Child Support
- Most Student Loans
- Court Fines and Criminal Restitution
- Personal Injury Damages caused by driving drunk or while under the influence of illegal drugs
THE BANKRUPTCY STAY
- Another benefit of filing a bankruptcy petition is the bankruptcy STAY of 11 U.S.C. § 362.
- The Bankruptcy Stay does just what it says - by federal law it STAYS (stops for the time being) all:
- Foreclosure proceedings
- Collections efforts including law suits and garnishments
- Repossessions of vehicles
- Telephone calls from creditors
- Why is this important?
- Because if you file a bankruptcy case BEFORE your foreclosure, BEFORE your court date, BEFORE the return date on your garnishment summons, etc., you can STAY those events and prevent them from taking place.