Bankruptcy Discharge
What is a Discharge in Bankruptcy?
Filing Chapter 7 bankruptcy is typically done in order to wipe out debts. Debts are able to be wiped out when they are "discharged" which means the debtor is no longer legally required to pay any of the debt. Once a debt has been discharged, no collected action can be taken by the creditor including calls, letters and personal contact.
If a debt is not discharged, the debtor is still responsible for the debt and the creditor can enforce payment. In chapter 7 bankruptcy a debtor can also agree to reaffirm a debt which means they intend to continue making payments in order to keep the property that the debt is attached to, such as a car or home. If a debt has been reaffirmed and the debtor begins missing payments, the creditor can enforce the debt beyond the bankruptcy.
When Does the Discharge Occur?
In a chapter 7 bankruptcy the debts are usually discharged once the time for a creditor to file a complaint has passed which is typically 60 days after the 341 meeting. Total time is about 4 months from the time the bankruptcy petition is filed. In a chapter 13 the discharge will not occur until the debtor has completed the repayment plan which is typically 3-5 years long.
Are All of the Debtor's Debts Discharged or Only Some?
There are some debts that are not able to be discharged due to public policy reasons, such as child support, or because the debts are a result of the debtor breaking a law such as a debt incurred while drinking and driving.
The most common debts that are not dischargeable are child support, student loans, taxes, debts incurred due to willful and malicious injuries to a person or property and government fines.
Can the Discharge Be Revoked?
Under certain circumstances - YES! If you have committed fraud, acquired property that should be included in the bankruptcy estate or the debtor commits an act of impropriety. Typically the request to revoke a discharge must come from a creditor within one year of the discharge
May the Debtor Pay a Discharged Debt After the Bankruptcy Case Has Been Concluded?
Yes, however, it can no longer be enforced by a creditor.
Related Information
- Information on Chapter 7
bankruptcy
- Discharging student loans
Make sure bankruptcy is the right choice for you with our free bankruptcy evaluation. Learn your bankruptcy options, ask questions, and make an informed decision so you keep as much property as possible.