When filing for bankruptcy, the bankruptcy discharge is an important concept to understand. The discharge in bankruptcy can vary depending on if you file for Chapter 7 or Chapter 13.
What Is A Discharge In Bankruptcy?
When a debt is “discharged” through bankruptcy, the debtor is no longer legally required to pay the debt. After discharge, creditors are prohibited from contacting you in any way about debt collection. Creditors cannot take any further legal action against discharged debts.
When Does The Discharge Occur For Chapter 7 Bankruptcy?
Chapter 7 bankruptcy involves the payment of debt through the sale of nonexempt assets. A certain time period is given for creditors to raise objections about the bankruptcy. When this period expires, the discharge is granted. This usually occurs 60 days after the 341 meeting with creditors or about 4 months after the initial bankruptcy petition has been filed.
When Does The Discharge Occur For Chapter 13 Bankruptcy?
Chapter 13 bankruptcy involves the payment of debt through a payment plan over 3 to 5 years. The discharge in Chapter 13 is granted after all payments have been made.
Are There Other Requirements To Getting A Discharge?
You must complete a financial management education course during the bankruptcy process. Consult with your attorney about this since you might have to complete the course before filing for bankruptcy. You may be exempt from taking this course if:
- There are no programs readily available in your area
- You are disabled
- You are on active military duty
How Do I Get A Copy Of My Bankruptcy Discharge?
The discharge is usually granted automatically with the completion of the bankruptcy. A copy of the order of discharge is mailed to you, all creditors, the bankruptcy trustee, and your attorney. Once creditors receive this order, any attempt to collect debt from you could subject them to punishment for contempt. Even if for some reason (for example, clerical error) you do not receive a copy, the discharge is still legally valid.
Are All My Debts Wiped Clean After Discharge?
The debts discharged depend on the Bankruptcy Code. Commonly, debts that may not be discharged are:
- Certain tax claims
- Debts not listed in the bankruptcy filing
- Spouse or child support
- Debts due to willful and malicious injury to person or property
- Debts associated with governmental fines or penalties
- Debts for government funded educational loans
- Personal injury debts caused by the debtor operating a motor vehicle while intoxicated
- Some retirement plan debts
- Certain types of housing fee debts
It’s best to consult with a qualified attorney about which debts can be discharged under bankruptcy. Also some of the debts mentioned above may be discharged under Chapter 13 but not under Chapter 7 bankruptcy.
What Else Can Stop Me From Getting A Discharge In Bankruptcy?
Besides not completing the financial education course, you could be denied discharge for:
- Not providing the requested tax documents
- Intentionally concealing property or assets
- Destruction or concealment of financial records
The bankruptcy discharge legally frees you from all debt responsibilities in accordance with bankruptcy law. An attorney with experience in bankruptcy cases can guide you through the process and make sure your rights are protected.
Need More Info?
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Disclaimer: This article is not meant to serve as legal advice. You should always consult with an experienced attorney for proper legal advice.