The goal of filing bankruptcy is to eliminate your debts so that you can get a fresh start to rebuild and recover following a financial crisis. The opportunity to resolve debt problems through bankruptcy is available to anyone who needs assistance regardless of the reason why they are in financial trouble. However, one requirement of filing bankruptcy is that the person lists all of their debts in their bankruptcy filing. You cannot pick and choose which debts to include in your bankruptcy case, including but not limited to, personal loans.
Filing Bankruptcy on Personal Loans
The requirement to list all of your debts in your bankruptcy filing serves several purposes. The first purpose is to provide the court and other parties in interest a true and accurate account of your entire financial situation. Another purpose for including all of your debts in your bankruptcy filing, including any personal loans, is to eliminate as much debt as possible to allow you to recover from your financial problems. The final purpose is to protect creditors from some creditors receiving preferential treatment by a debtor who wants to protect some creditors over other creditors.
It is understandable that you would not want to list a personal loan from your partner, parents, friends, or other people in your life. What you must remember is that you are filing bankruptcy in order to get a fresh start. If you do not list a personal loan in your bankruptcy filing, this debt will not be discharged. Should the person decide to pursue collection efforts on the personal loan in the future, he or she can do so as if the bankruptcy case was never filed.
While you may not believe this could happen, your relationship with this person could change in the future leaving you vulnerable to a lawsuit for collection of the personal loan. You are filing bankruptcy to prevent creditors from taking action against you to collect debts that you cannot pay. It would be unwise to leave yourself open to this possibility on a personal loan when you are working diligently to improve your financial well-being.
You Can Choose to Repay Personal Loans
Listing personal loans in your bankruptcy filing does not prevent you from voluntarily repaying personal loans after your bankruptcy case is closed. Your bankruptcy case discharges the personal loan but that does not mean you cannot choose to repay personal loans if you feel obligated to do so. It is completely up to you how you want to handle personal loans after the bankruptcy case is closed.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans, and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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