Understanding the distinction between pre-petition and post-petition debt is crucial when navigating a bankruptcy case. These terms directly impact which debts can be discharged and which debts you remain responsible for after filing bankruptcy.

Pre-Petition Debt

  • Definition: Any debt incurred before the date your bankruptcy case is officially filed with the court.
  • Importance of Filing Date: The filing date determines the cutoff for what is considered pre-petition debt. It is not the date of your hearing or discharge.
  • Examples of Pre-Petition Debt:
    • Credit card balances
    • Medical bills
    • Personal loans
    • Payday loans
    • Foreclosure or repossession deficiencies
  • Outcome:
    • These debts are included in your bankruptcy filing and are typically eligible for discharge, meaning you are no longer legally responsible for paying them.

Key Point: You must list all pre-petition debts when filing your bankruptcy case, as any omitted debts may not be discharged.

Post-Petition Debt

  • Definition: Any debt incurred after the bankruptcy case is filed.
  • Exclusion from Bankruptcy:
    • Post-petition debts are not included in your bankruptcy case.
    • You remain fully responsible for paying these debts.
  • Examples of Post-Petition Debt:
    • Medical bills incurred after filing
    • New credit card charges
    • Car loans or other financed purchases
  • Specific Rules for Chapter 13:
    • In a Chapter 13 case, you cannot take on new debt without court approval. Doing so may jeopardize your repayment plan and risk dismissal of your case.

Why the Timing Matters

The timing of when debt is incurred (pre- or post-petition) determines its eligibility for discharge in bankruptcy. For example:

  1. If you charge a credit card before filing: The balance is pre-petition debt and can be discharged.
  2. If you charge a credit card after filing: The balance is post-petition debt, and you are responsible for repayment.

Financial Stability and Bankruptcy Education

To help debtors avoid post-petition financial pitfalls, two mandatory courses are required:

  1. Credit Counseling Course (Pre-Bankruptcy Filing):
    • Helps evaluate your financial situation.
  2. Debtor Education Course (Post-Bankruptcy Filing):
    • Guides you toward financial stability after your case concludes, focusing on budgeting and long-term financial management.

Key Takeaways

  • Pre-Petition Debt: Discharged in bankruptcy; must be included in your filing.
  • Post-Petition Debt: Your responsibility; not part of your bankruptcy.
  • Goal: Achieve financial stability and a clean slate by carefully managing your debts before, during, and after the bankruptcy process.

If you’re unsure about how bankruptcy may impact your debts, or if you’re considering filing again, consulting an experienced bankruptcy attorney can provide clarity and help you make the best decision for your financial future.

Contact us today for guidance and support through the bankruptcy process.