What if There Are Debts Incurred After Bankruptcy? Will That Be Covered Also?
When you make the decision to file bankruptcy, you may feel a great sense of relief. Chapter 7 bankruptcy offers you a fresh start as most of your debts can be eliminated. However, it is important to understand that only debts that exist at the time you file your case, known as pre-petition debts, are discharged. Any debts incurred after your bankruptcy filing known as post-petition debts, are your responsibility to pay.
Taking Out New Debt
If you retained a credit card after you filed bankruptcy and you charge anything to the card, that debt will not be discharged with your Chapter 7 bankruptcy. The courts will label any debts incurred after the date your bankruptcy was filed as post-petition debts and you will be obligated to repay those debts. If you reaffirm a debt that could be discharged, you are agreeing to be personally liable for that debt even after the bankruptcy is discharged.
Mortgage or Vehicle Payments
If you have ongoing payments, such as mortgage or vehicle loans, the entire obligation is considered pre-petition debt and that will be discharged. However, although the debt is discharged the lien against your property is not. If you fail to make your payments on time, the lender can repossess or foreclose on your property. It is not uncommon for car loans to be reaffirmed as part of a bankruptcy proceedings as the lender may want to certify that you are going to continue paying for your vehicle even after you have filed bankruptcy. It is important to discuss reaffirming your car loan with an attorney as you are waiving one of the benefits of bankruptcy discharge. In addition, each state has different laws on whether a car loan can be reaffirmed and whether you are able to keep your call after bankruptcy.
Homeowners and Condominium Fees
Chapter 7 bankruptcy discharges unpaid homeowners and condominium fees that are owed on the day you file your case. However, fees that occur after you file, even if you surrender your property as part of the bankruptcy, are still your responsibility until the property is sold or foreclosed. As long as the property remains in your name, you are responsible for fees that occur after you file.
If you or a loved one is struggling financially, filing bankruptcy may be the best option. Contact our office for a no obligation initial consultation to learn what rights you may have. You can reach us by phone or complete the simple form online to speak to a qualified bankruptcy attorney.