Bankruptcy is a legal process that allows individuals or businesses to restructure their debts and create a plan for repayment. When filing for bankruptcy, the individual or business is declared "bankrupt," which means they have no more rights over their assets and are often forced to sell them to pay off creditors.
After filing for bankruptcy, several steps must be taken to ensure that debts are discharged and financial stability is restored. In most cases, all debts except for secured debts (such as a mortgage or car loan) will be discharged after 3-5 years of repayment. Creditors may also be able to restructure their debt through negotiations with the individual or business.
However, some debts may not be dischargeable, such as student loans, tax debts, and debts incurred while living off the grid. Additionally, individuals who have filed for bankruptcy multiple times may face difficulties in obtaining credit or loans in the future.
In most cases, no debt goes away after filing for bankruptcy. However, the process can help individuals and businesses to create a new financial plan and start rebuilding their credit score. If you're struggling with debt and considering bankruptcy, it's essential to understand that debt is not entirely gone, but rather, it's been restructured.
Reference:
Does Debt Go Away After Filing For Bankruptcy?
https://www.articleted.com/article/572429/43204/Does-Debt-Go-Away-After-Filing-For-Bankruptcy--