When a debtor files for personal bankruptcy, it only addresses pre-bankruptcy debts. Some types of post-petition filing debt may be added later.
There are two routes to declare personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 is a liquidation plan that sells your assets to pay creditors and Chapter 13 is a re-payment plan, with money paid to the trustee on a biweekly basis. Those funds are then paid to creditors. Chapter 7 and Chapter 13 cover all debts prior to filing. However, only some types of debt may be filed later.
If you have hired a bankruptcy lawyer, which is something you should seriously consider, they will discuss what debts are and are not covered. Unsecured debts must be included. An unsecured debt is not backed up by collateral. An example would be medical or credit card bills.
On the other hand, a secured debt would be a mortgage on a property, and it will be paid by a bankruptcy plan, but the debt itself is not discharged when the bankruptcy process is concluded. The debtor must continue to pay on the mortgage even after other debts have been discharged.
Even though a debtor may be in bankruptcy proceedings, they may find it necessary to take on more debt or apply for additional loans. This may be done, but it requires permission from the court. An Iowa bankruptcy lawyer will file a motion to incur debt and send it to the trustee. The trustee then makes a recommendation to the court. The debtor needs to wait for permission to incur more debt and would be in trouble if they proceeded without the required permission.
In any instance where a debtor, already in bankruptcy, needs to incur more debt, they must consult with their Iowa bankruptcy lawyer. This is an issue that cannot move forward without the courts affirming that it is clear to move ahead. When discussing the bankruptcy process with an attorney, it is vital that all the debts, both pre and post bankruptcy petition debts, are thoroughly reviewed. You need to make an informed decision, in conjunction with your lawyer, about how to proceed and what incurring extra debt means after filing.