When we talk about bankruptcy, we talk a lot about “discharge of debts,” but what exactly does that mean? When are the debts discharged? What debts are discharged? Can creditors object? Let’s discuss.
Bankruptcy discharge is a court order that releases a debtor from the obligation to pay certain debts. The creditor is no longer permitted to take any collection action on these debts, and the debtor is no longer legally required nor can they be forced to pay them.
Debt discharge occurs at the very end of a bankruptcy case. With Chapter 7 bankruptcy, it will usually happen between three and six months after the initial filing. With Chapter 13 bankruptcy, it will happen when the debtor makes all required payments under the agreed-upon payment plan. This is usually between three and five years.
Not every debt can be discharged. If a debt is not dischargeable, this means that the debtor has to repay it in full after the bankruptcy case closes.
Examples of non-dischargeable debts
· Child support
· Fines and penalties
· Student loans
· Debts arising from debtor fraud
· Debts that were not disclosed in the bankruptcy filing
In Chapter 7, creditors as well as the trustee can object to certain debt discharges. After a case is filed, creditors receive a notice with a deadline for objecting to the discharge. In order to object, the creditor must file the objection in court before the deadline. Reasons for objections can include concealment of property, destruction or concealment of records, perjury, failure to account for loss of assets, or violation of a court order.
If you are not sure what the right solution is for you, an experienced debt relief law firm such as Harold Shepley & Associates would be able to answer your questions with a free consultation. Contact us today at 1-866-284-7062 or visit us at www.shepleylaw.com to find out more information on your debt relief options.