Many clients have been told that they can file bankruptcy “only on credit cards” or that they can’t “file on the house.” I don’t know where this information comes from, but it’s simply wrong.

If you file bankruptcy, you don’t “file on” anyone or anything. There is no such thing as “filing on” any creditor. If you file a Chapter 7 or Chapter 13 bankruptcy, you must list all your creditors, whether or not you intend to repay any of them and whether or not the debt is dischargeable. Similarly, you must disclose all of your assets, whether or not you intend to keep them. You are not allowed to pick and choose the creditors or assets that are listed; federal law requires you to disclose ALL of your debts and ALL of your assets.

Some debts (child support, student loans, some taxes) will survive the bankruptcy and will have to be repaid despite your discharge. You still have to list those creditors in your bankruptcy paperwork.

You may want to repay the $5000 you borrowed from Mom & Dad. Fine, you can repay them after filing, but you still have to list Mom & Dad as creditors.

Maybe you want to keep making your house payments and keep the house. You can do this, but you still need to list the mortgagee as a creditor and the house as an asset.

The next time someone sitting in the local tavern gives you some free legal advice and says that you should, “just file bankruptcy on the credit cards and leave everything else out,” simply nod politely and smile. The person is misinformed, but it’s not worth starting a bar fight over. (You were probably wondering how the picture was relevant.)