Legal Question in Bankruptcy in California

Re: Filing Chapter 7

You would have to list the debt in the bankruptcy, but you can always repay it after the bankruptcy. If the debt is secured by the tools (and they may be repossessed if the debt isn'

Re: Filing Chapter 7

All debts must be listed on the Chapter 7 bankruptcy, and usually are discharged. That would include the debt to the tool company. If the tool company wants to extend credit to your husband despite the BK, that is its decision. It is not uncommon for a debtor and creditor to work out an informal arrangement. The tools, however, might be secured debt which means that if your husband doesn't pay, the tools can be repossessed. In that event, a formal reaffirmation agreement may be signed whereby your husband would promise to continue making payment. The danger with reaffirmation agreements is that if his financial troubles continue and he can't keep up after the bankruptcy is over, he can be sued and his paycheck attached, etc. If you don't have an attorney, the court would have to decide whether a reaffirmation agreement is appropriate under the circumstances.