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You can’t pick and choose debts when filing Bankruptcy

Often times, prospective clients will call our firm about filing personal bankruptcy.  One of the concerns they raise is that they have a specific debt, such as a credit card with their personal bank, that they wish to not include in a bankruptcy filing.  The question ultimately becomes, can I exclude that debt? 

The answer is — NO, you cannot exclude a debt when filing personal bankruptcy.  The U.S. Bankruptcy Code requires that all of their assets and all of debt must be included in the bankruptcy filing.

Bankruptcy law doesn’t allow a debtor to ‘pick and choose’ debts to include and therefore effectively decide which creditors get paid.  Remember, when you choose to file bankruptcy, all of your creditors will take financial loss. The reasoning behind including ALL debts is fairness.  If there is any money in your bankruptcy to be paid to creditors, it must be divided up between all creditors accordingly.  Allowing you to pay one debt and not another debt would be favoring one creditor over another.  The law simply does not permit favoritism. 

Including all debts in your bankruptcy filing includes things that they may want to keep, such as your home or automobile. Including them does not mean you are giving them up.  In most cases, you will retain and continue to pay your home and car as you always have.  However, they must still be listed in your bankruptcy.  Including your home and your car isn’t a horrible thing.  You can retain and pay.  But, including it is an absolute requirement. 

Mooney Law provides FREE consultations for Maryland bankruptcy.  Call us today to schedule a phone appointment with our Maryland bankruptcy attorney. Waiting and borrowing more can only cause more financial and personal stress and problems. Call today for a FREE consultation at 833-MOONEYLAW.   For more information, visit Mooney Law on the web.