I’ve heard that new law requires you to pay your debts back, and you’re not resolved of the debts are included in your bankruptcy. Is that true?
Yes and No. There are two main types of Bankruptcies that you would file. Chapter 7 which is a Liquidation Bankruptcy. In this one your debts except for certain things such as Student Loans or Recent Taxes are discharged where you no longer owe them. There is also Chapter 13 which is a Repayment Bankruptcy and sometimes called a Wage Earners plan. Here your finances are taken into account and you are required to make a set payment over 3-5 years every month. At the end of that time they discharge the remaining debt.
The new(well not so new anymore) laws of 2005 require to file a Chapter 7 you must pass two means tests. The first is if you earn more then the average for your area, the second is if it is determined if you have enough disposable income to pay at least $100 a month over 3-5 years. If you fail on either of these you may be forced into a Chapter 13.
The best thing to do is talk to a Bankruptcy attorney. They will give you your options and most give you a free short consultation.
