What is defined as post-petition debt?

Post-petition debt refers to any obligations or debts that arise after the filing of a bankruptcy petition. This type of debt is crucial in bankruptcy proceedings because it is considered separate from prior obligations that were incurred before the bankruptcy was filed. It typically includes any expenses that are necessary for the ongoing operations of a business or for maintaining a household, such as rent, utilities, and other essential services.

Understanding post-petition debt is important for both creditors and debtors in bankruptcy cases. Creditors may continue to extend credit under certain circumstances, while debtors must manage these debts carefully to ensure they can navigate the bankruptcy process effectively.

In contrast, debts incurred before filing for bankruptcy are known as pre-petition debts, and liabilities that are forgiven or discharged in bankruptcy do not apply to future obligations. Recognizing the distinction between these types of debts helps individuals and businesses understand their financial responsibilities and the implications of bankruptcy on their finances.