Pursuant to section 341 of the Bankruptcy Code, the Office of the United States Bankruptcy Administrator has prepared this information sheet to help you understand some of the possible consequences of filing a bankruptcy petition under chapter 7 of the Bankruptcy Code. This information is intended to make you aware of -

(1) the potential consequences of seeking a discharge in bankruptcy, including the effects on credit history;

(2) the effect of receiving a discharge of debts in bankruptcy

(3) the effect of reaffirming a debt; and

(4) your ability to file a petition under a different chapter of the Bankruptcy Code.

Speak to your lawyer if you need further information or explanation, including how the bankruptcy laws relate to your specific case.

Statement of Information Required by 11 U.S.C. 341

There are many other provisions of the Bankruptcy Code that may affect your situation. This statement contains only general principles of the law and is not a substitute for legal advice. If you have any questions or need further information as to how the bankruptcy laws apply to your specific case, you should consult with your lawyer.

What is a discharge?
The filing of a chapter 7 petition is designed to result in a discharge of most of the debts you listed in your bankruptcy schedules. A discharge is a court order that says that you do not have to repay your debts, but there are a number of exceptions. Debts which usually may not be discharged in your chapter 7 case include, for example, most taxes, child support, alimony, and student loans; court-ordered fines and restitution; debts obtained through fraud or deception; debts which were not listed in your bankruptcy schedules; and personal injury debts caused by driving while intoxicated or taking drugs. Your discharge may be denied entirely if you, for example, destroy or conceal property; destroy, conceal or falsify records; or make a false oath. Creditors cannot ask you to repay debts which have been discharged. You can only receive a chapter 7 discharge once every eight (8) years.

What are the potential effects of a discharge?
The fact that you filed bankruptcy can appear on your credit report for as long as 10 years. Thus, filing a bankruptcy petition may affect your ability to obtain credit in the future. Also, you may not be excused from repaying debts that were not listed on your bankruptcy schedules or that you incurred after you filed bankruptcy. There are exceptions to this general statement. See your lawyer if you have any questions.

What are the effects of reaffirming a debt?
After you file your bankruptcy petition, a creditor may ask you to reaffirm debt or you... read more...