Do you have to include your house in bankruptcy? How about your car, does the car loan have to be included in the bankruptcy? The answers are yes on both counts. The bankruptcy law, in this regard, is pretty straight forward. Any debt that you have on the day of the filing of your bankruptcy case must be included in your bankruptcy petition.
So, while you may want to bankrupt only your credit card debt and leave the house and car out of it, the bankruptcy law says otherwise; all debt must be listed. BUT, just because you have to list the creditors that you do not want to bankrupt like your mortgage and car loan that should not cause you any alarm. Putting aside the issue of Reaffirmation Agreements (to be discussed in different blog) and assuming that the car/home does not have a ton of equity that cannot be exempted as part of your bankruptcy case, then the fact that the mortgage/car loan were included will not have any negative consequence. At the end of the day, as long as you continue to make your car/mortgage payments, then you will be able to retain your car/home. The filing of your bankruptcy case will not change that.
Same goes for student loans. While they are almost always non-dischargeable –meaning, you are stuck with them despite the bankruptcy filing- they still have to be listed in your bankruptcy case.
As for money owed to friends or family members, believe it or not, they are considered creditors just like everyone else and must be listed in your bankruptcy petition. If on the other hand, the money given to you by that person was considered by them to be a gift, then there is no loan, they are not a creditor, and they need not be listed.
Also keep in mind that just because you listed your cousin as a creditor because you owe him some money, does not mean that you cannot pay him back. After your bankruptcy case has concluded you are free to pay back any creditor you like, including your cousin.
You should NOT however try to pay back money owed to family members prior to the filing of your bankruptcy case!
Finally, bear in mind that at the meeting of creditors the trustee will ask you if you have listed all of your debts and all of your assets? By debts he means creditors. Can you lie to him at that point? Sure you can. Is it advisable? Absolutely not! If you get caught in that lie then your bankruptcy case can get dismissed with prejudice and you are now stuck with all that debt. In addition, if the US Attorney’s Office has some free time on their hands, you may also be prosecuted for bankruptcy fraud.
The morale of the story: regardless of what type of debt it is or who it is owed to, each creditor is entitled to notice and must be listed in your bankruptcy petition.