There are many different terms thrown around when dealing with a Chapter 7 bankruptcy. One of the most common terms you’ll probably hear throughout the process is a “debt discharge.” Let’s take a look at a few of the most common questions surrounding a debt discharge.
What does a “discharge in bankruptcy” mean?
When a debt is discharged through bankruptcy, it means that the debtor is no longer required to pay that money back. A debt that has been discharged can no longer be collected on by your creditors, meaning debt collectors can no longer harass you for money related to that debt.
When is a debt discharged?
In order to have a debt legally discharged, there are a few different pathways you can take. First, with Chapter 7 bankruptcy, you can get debts not covered after liquidation discharged from your account. Debts can also be discharged under Chapter 13 bankruptcy, but not until the payment plan created under the bankruptcy process has been completed. However, not all debts can be discharged. Secured debts will not be discharged under any kind of bankruptcy.
What debts can be discharged?
Certain debts cannot be eliminated through discharge. Some of those debts include tax-related debts, fines and penalties owed to the government, spousal support, alimony and child support, government-funded education loans, and debts related to personal injury cases.
However, some of these debts are dischargeable under a Chapter 13 bankruptcy plan. Settlements from divorce and certain tax obligation debts can be discharged under Chapter 13 but not Chapter 7.
Can a debt discharge be revoked?
Although revoking a discharge is not common practice with bankruptcy, it can happen. A discharge is usually revoked if the court finds out that information was hidden from them or that certain documents were not provided during the original bankruptcy hearing. If the discharge was obtained fraudulently, it may be revoked.
It’s important to always be upfront about your debts throughout the bankruptcy process. For assistance with your bankruptcy and to determine which debts may be able to be discharged, contact the expert bankruptcy attorneys at Michael F. Kanzer & Associates.