Bankruptcy laws are complicated and the facts of each case are unique. Personal bankruptcy is an effective way to deal with consumer debts like credit cards and personal loans. On the other side it does not discharge all owed debt such as federal government charges, taxes liabilities and student loans. You will still owe alimony, child support and other post-divorce settlements. If you’ve been convicted of a crime or a misdemeanor, you will still owe any fines or restitution.
Pre-bankruptcy protection judgment is when a creditor files a civil complaint against you in court and obtains a judgment lien. This allows the creditor to take the additional steps of garnishing your wages or freezing your bank account, to get the money owed. Bankruptcy makes judgments of this nature go away.
Some debtors choose to reaffirm secured loans. Instead of discharging the debt, a new agreement is established with the creditor. This can make sense if you don’t want to lose the collateral, like your house. If the debtor chooses to reaffirm the secure debt, you keep the secure debt, and continue making payments on your home loan.