Keep in mind that automatic stay and bankruptcy discharge are two different things. The automatic stay will just stop creditors from collection activities and enforcing liens only during the pendency of your bankruptcy case with some exceptions discussed above. A bankruptcy discharge will eliminate your debt forever.
Liens survives the bankruptcy discharge unless you can avoid or reduce it through a motion filed with the bankruptcy court. For example, you still have to pay your mortgage and car loan if you want to keep your house or car. But your secured lender can only take the collateral if you fail to pay and cannot pursue you personally for the deficiency of the debt like a wage garnishment or bank levy because your personally liability is discharged in the bankruptcy.
Examples of dischargeable unsecured debts are credit cards, personal loans, payday loans, medical bills, PG&E bills, cable bills, personal injury claim in a car accident not involving DUI, deficiency from car repossession or foreclosure, and old IRS tax debt (if all requirements are met–call me for more details).
Examples of nondischargeable unsecured debts are child support, alimony, fines, traffic tickets, debt incurred through fraud, student loans (unless you can show undue hardship), 401k pension loan, and recent IRS tax debt.
Furthermore, potential bankruptcy filers can do something that can disqualify them from Chapter 7 or 13 Bankruptcy discharge. It is important that you talk to a bankruptcy attorney soon if you are contemplating filing bankruptcy. A bankruptcy attorney can warn you about the do’s and don’ts of bankruptcy before you make any mistakes.
Of course, these are a few examples because there is just so much I can discuss on a webpage and everyone’s case is unique so bankruptcy law will apply to them differently. Call for a bankruptcy consultation for in-depth discussion on how bankruptcy can help you.
