(Editor's note: Post-petition just means debt acquired after you filed for bankruptcy)
Be Careful Acquiring More Debt After Filing for Bankruptcy, a Discussion About Post-Petition Debt
Hi, Matt McArthur, bankruptcy attorney at Clear Counsel Law Group.
Today I want to talk about what types of debts can be wiped out in terms of when the debts are coming into existence. In other words, does the timing of when you got the debt affect whether or not we can wipe it out in bankruptcy.
We're going to make the most basic breakdown of what types of debts are wiped out, and what types are not.
The Difference Between Post-Petition and Pre-Petition Debt
Generally speaking debts that existed when you filed bankruptcy can be wiped out, with certain exceptions of course.
Then debts that incurred or came into existence after you filed your case are not wiped out.
Those are never going to be able to be wiped out.
There's no exception to that rule.
In other words, if you have what we call a post-petition debt, that means we filed your case, we submitted all the documents to the bankruptcy court.
That is the petition, that involves your petition and schedules, and so when we say post-petition, we mean after we turned in those papers.
Even if your bankruptcy case is still ongoing, it's still pending, you still have to go to court, you're still waiting for you discharge.
During the bankruptcy's considered post-petition. A post-petition and after filing debt cannot be wiped out, ever. Most pre-petition debts can be wiped out with certain listed exceptions.
An Example of Post-Petition Debt
I want to give you an example of this. Let's say you come in and you have $5,000 in medical debt that you want wiped out. When we submit your paperwork to the court, we're going to have listed the $5,000 in medical debt that you owe at the time the paperwork is submitted.
Let's say that the very next day, you unfortunately contract a deadly disease, and you have to go to the emergency room.
You have extensive medical treatment and services provided to you, and you rack up a huge bill.
In this unfortunate scenario, even though it's one day after you filed your bankruptcy case, the new medical bills related from the treatment that was provided on that date, will not be able to be included in your bankruptcy case.
I hope this helps you understand the difference between pre-petition debt, and post-petition debt and just know that post-petition debt is not ever going to be wiped out so you want to be very careful with any new debt after you have filed for bankruptcy.
I'm Matt McArthur, hope to talk to you soon.