The goal of filing for bankruptcy to get a discharge of your debts. When a debt is discharged, it is no longer enforceable against you personally.
When you have personal liability for a debt, a creditor can sue you in an affect to collect directly from you. The bankruptcy discharge eliminates the that personal liability for a discharged debt – which means a creditor cannot sue and collect from you personally if the debt was discharged in bankruptcy.
But a discharge doesn’t mean they can’t sue – just that they can’t sue and collect from your personally. Though your personal liability is discharged, most liens continue against property you own. No lien can attach to anything you acquire after the discharge is issued, though.
In other words …
If you file for bankruptcy and discharge your mortgage, the mortgage lender can foreclose. They cannot, however, try to collect any deficiency from you personally.
If you file for bankruptcy and discharge your car loan, the lender can repossess the car if you stop making payments. They cannot, however, try to collect any deficiency from you personally.
Remember, though – not all debts are discharged in bankruptcy. If a debt is not discharged in bankruptcy then it remains valid after the case.
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