In the past, filing bankruptcy used to carry a stigma of failure. Many people thought that if someone would file for bankruptcy, they were a deadbeat for not paying their bills. Because of this, most people did everything within their power to hide the facts of their bankruptcy filing to the world. In the last four years it has lost a lot of the stigma. I don't know if it's just moral values are declining or it might be that so many Americans are filing bankruptcy these days it's become commonplace.
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For the noble Americans that do everything in their power to avoid filing bankruptcy because they do not want to walk out on their debts, they can pay someone back after the bankruptcy discharge if they feel led. I personally, do not think it's necessary unless it is a friend or family member. In this case, just sit down and talk with this person and let them know that they will not be included in the bankruptcy and will be paid back when it's possible. For everyone else, as long as the bankruptcy filing was not intentional, this is what it was created for. Filing bankruptcy was to give good honest hard-working Americans a second chance and a fresh start. If you have to pay your debts back after the bankruptcy discharge on the side agreement, it will be pretty hard for one to get themselves going again financially being strapped to debts.
Another section of debt that will survive the bankruptcy is secured debt. Most lenders that hold secured debts will ask the debtor to sign a reaffirmation agreement during the bankruptcy. This agreement will be submitted with the bankruptcy petition to the bankruptcy court. What a reaffirmation agreement does is reiterate the debt and the terms of the contract. Even though the debt is secured by the property, the agreement is stating that the debt will survive the bankruptcy filing and be paid continuously. If the person filing bankruptcy defaults on the loan, the property will be repossessed at the cost of the debtor. Many times, the bankruptcy attorney will tell their client that this is the time to get rid of a car or a house that is upside down. If the secured property is included in the Chapter 7 bankruptcy, all deficiencies, legal costs and damage on the property will be wiped out in the bankruptcy discharge. If that same debt is reaffirmed and the person loses it a year later, the creditor can come back and sue the individual for the legal fees, deficiency and/or damage. The person will have no way out except to pay it. The creditor will be able to get a judgment and force a wage garnishment on the individual. This is devastating to an individual post Chapter 7 bankruptcy.
Before filing bankruptcy is very important for a person to be honest with their bankruptcy attorney and do your best to look into their crystal ball and run every possible scenario, even the worst ones. A car or a house could be replaced later, but the damage caused by a judgment from a creditor could destroy a person's financial future.
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