What debts can be included in a bankruptcy?

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What debts can be included in a bankruptcy?

I am currently in the process of working through a dissolution agreement and one of the debates is if and how much we owe my mother-in-law and if that will go in to the dissolution. My husband has gotten me in to a financial bind with 2 garnishments that will “never” be paid off because they are adding interest at 25% and that is what they are garnishing so I know I want to do the bankruptcy anyways. Just want to know if the in law amount can be included.

Asked on August 22, 2011 Ohio

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

When you file bankruptcy, you will need to list all creditors and the amount owed to each creditor.  The debt owed to your mother-in-law should be included in your bankruptcy.  Depending on your income and other factors, you may be eligible to file Chapter 7 bankruptcy.  Chapter 7 is straight liquidation which eliminates your debts.  You can also indicate in the bankruptcy that you intend to reaffirm the debt which means continue paying.  You do NOT have to reaffirm a debt.

If you are not eligible to file Chapter 7, you may need to file Chapter 13.  A Chapter 13 bankruptcy is one in which you have a plan (budget) for repayment of creditors.

To determine whether you are eligible for Chapter 7 or Chapter 13, it would be advisable to speak with a bankruptcy attorney.


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