Being bankrupt has become a reality for a lot of people. As such, debt-relief through bankruptcy filing has become a welcome option for people struggling financially. Declaring bankruptcy will enable you to pay back lenders, wipe out your debts, and have a fresh start at life. Before proceeding, however, you must first be familiar with the different types of bankruptcy. Most people filing for bankruptcy would have their debts eliminated either through liquidated assets or through a payment plan.
If you want to learn how to file and how a bankruptcy case can help you with your financial problems, it is necessary to learn what is referred to by the term discharged debt.
A discharge is the court order that will release you from certain types of debt after you declare bankruptcy. Such is true for a declaration of bankruptcy under either Chapter 7 (liquidation) or Chapter 13 (reorganization), with the numbers about the specific filing chapter. (The common names of the two bankruptcy filings mentioned are pretty straightforward, but a reliable bankruptcy lawyer can provide legal help and differentiate them in more detail).
A bankruptcy discharge will effectively prevent certain debt collectors from asking for repayment for what you owe them. Essentially, a debtor does not have to pay creditors of discharged debts, with no fear of getting sued.
Some people think that such discharge is limited to a bankruptcy petition under Chapter 7. A good local attorney can explain to you that even a Chapter 13 petition for bankruptcy may eventually result in discharged debts after a certain period.
After all scheduled payments (be it one-time or monthly payments) in the debt-repayment plan you proposed have been made, you may be eligible to have certain debts forgiven. Pursuant to bankruptcy law, an individual who filed for bankruptcy may have these discharged:
- Debts from credit card bills
- Debts from medical bills
- Debts incurred as a result of an injury
- Specific types of tax debt
- Other types of unsecured debts
In contrast, as stated in the bankruptcy code, the following will likely not be included in the discharge:
- Student loans
- Criminal fines or penalties
- Other types of tax debt
- Child support or alimony
- Mortgage payment
- Debt from DUI death or personal injury
- Other debts similar in nature
An individual who files for bankruptcy may have the following forgiven unless the creditor files an objection and brings to court a motion for the said debt to not be included in the discharge:
- Debts incurred from fraudulent activities
- Judgment from a civil court
The bankruptcy court will send a discharge notice to your unpaid creditors Such will also be sent to your assigned bankruptcy trustee, or the individual assigned to oversee your payments to every lender in your payment plan. This should free you from any harassment from any collector of the said creditors.
Aside from paperwork on your Chapter 13 filing, an expert bankruptcy attorney can help you avoid repossession or foreclosure of personal property, when necessary. He or she can also help you look forward to life after bankruptcy. Contact us at E Orum Young for any legal concerns about bankruptcies.