Taxes, child or spouse support, criminal fines and student loans are some debts that bankruptcy does not cover. During a Chapter 7 proceeding the debtor turns over all nonexempt property or belongings to a trustee, who then converts them into cash which is divided among the creditors. The debtor receives a discharge for all debts that don't fall under the list of exceptions. Bankruptcy generally helps individuals who are dealing with unemployment, medical expenses, overextended credit, marital problems or large unplanned expenses. It is not designed to rescue overzealous shoppers and credit card fanatics.
Bankruptcy laws vary state from state.
By Allison Ebel Debt is more than a stack of student loans or credit card bills. How you manage your money and lifestyle will affect how much you'll need to manage your future debt. Driving Straight to Debt Depending on your lifestyle, it can be a budget requirement or a superfluous luxury. Whether or not you choose to drive your own wheels can have a major impact on your monthly budget but it can also shape the scope of your debt. After you decide between leasing or buying, keep in mind that the opportunity to dig yourself into an auto-pitfall comes not so much from a monthly payment, but all the incidentals and hidden costs.