Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Take a look at the link above and you will be able to see what items that you own that you will be able to exempt form being attached by creditors in a bankruptcy. It looks that you will be able to claim both of your cars as exempt if you and your spouse both file for BK.
Since you are upside down on your home and there is no equity, you will need to do what is called a reaffirm on the home loan so that you can keep the house.
The student loans are not normally dischargeable in a bankruptyc so you will have to continue to pay on those the best you can or work out something with the student loan companies.
If you file a chapter 7 the credit card debts will be likely discharged. However, after 2005 you have to qualify to file for chapter 7 under what is called the means test. If your family income is too high when compared to the median income levels in your area, you will be forced to file a chapter 13 reorganization plan. In that case, you will likely have to pay the credit card companies cents on the dollar.
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At the link above you will find the BK form for reaffirming a loan. What that means is this: Normally, in the bankruptcy the loan on the home would be discharged and the lender would foreclose on the home and if the sale of the home at the auction brought in less then the outstanding loan amount, you would not be liable for the negative balance because of the BK discharge.
If you do not want the lender to foreclose on your home, you will have to tell the lender that you intend to keep current on your payments and that you want the loan to survive the bankruptcy. In other words, when you reaffirm the loan, if you then default on the payments after the bankruptcy, you will be liable for the negative balance.