The main purpose of a bankruptcy is a fresh financial start. The bankruptcy gets you a fresh start by releasing you from approved debts, allowing you to keep certain assets, and entering an order that tells your creditors to stop trying to collect the debts.
They are not supposed to make any efforts to collect a debt. The court sends a notice directly to the creditors listed in your bankruptcy as soon as you file. It tells them to stop. If a creditor tries to collect anyway, they can face damages, court costs, attorney’s fees, and penalties. Most creditors will ask the court before trying anything.
You are allowed to keep certain properties. These are called, “exemptions”. There is a Federal List and a Washington State List of these Exemptions. You must pick one list or the other. You cannot choose some property from one list and some from the other. In most cases, all of your assets are exempted from the Bankruptcy – which means that you keep them.
In general, there must be a specific law that says the debt does not qualify for the release. Debts which do not go away include taxes, alimony and child support, fines and fees from governmental actions, student loans, some hazardous waste or property issues, and some other types. Secured debt and intentional injuries and fraud matter require special consideration.
Yes, bankruptcy is complicated with a lot of exceptions. An attorney can go over your specific situation with you if you are trying to get back your driver’s license, etc. You can learn a lot at a free, initial meeting with a bankruptcy attorney.