Debt Management after Bankruptcy
Financial responsibility does not end when someone declares bankruptcy. A new stage of debt management has begun. If the court determines you can afford it after filing for bankruptcy, you must pay your debts out of your income.
Even after the bankruptcy order expires, these payments may continue for long. It’s a common misconception that declaring bankruptcy eliminates all of your debts. This is not true.
You will still be responsible for paying some debts not covered by the bankruptcy order, such as past-due child support and child maintenance obligations. Additionally, secured debts such as a mortgage are excluded from bankruptcy.
The creditor may take legal action to recoup their losses if the debt is secured. They can take your house back if you don’t make your payments.
Only exempt property is safeguarded in bankruptcy in terms of assets. Typically, this includes furniture, tools for your trade and cars up to a specific value. Your creditors may be paid back using any additional purchases.