When a debtor submits a petition for a Chapter 7 or a Chapter 13 bankruptcy, the desired result is a bankruptcy discharge. The bankruptcy discharge is an official order that releases debtors from their debts. It also legally bars creditors from taking any collection actions against the debtor. Once a bankruptcy has been discharged, the debtor should no longer receive harassing phone calls or letters and all attempts to sue for past due debts should be halted.
Chapter 7 and Chapter 13 discharges happen a bit differently. A Chapter 7 discharge typically occurs once the bankruptcy case finalizes, which is approximately four months after the debtor files the petition. A Chapter 13 discharge, on the other hand, happens once all of the required payments laid out in the bankruptcy plan have been made to creditors. This can be up to four months after the bankruptcy petition is filed.
Before you get too excited, you should understand that many people have debts that are deemed by bankruptcy law as nondischargeable. Additionally, you may be required to pay some of your past debts after your bankruptcy has been discharged. If you have specific questions regarding your debts, financial situation, or which bankruptcy is the right choice for you, you should contact a seasoned bankruptcy attorney.
What Debts Cannot Be Discharged in Chapter 13 Bankruptcy?
- Child support and alimony debts
- Specific tax debts
- Student loan debt
- Personal injury or death judgments that result from driving under the influence
- Unpaid criminal fines
If you have a debt that was incurred as a result of fraud or you have any civil court judgments, they usually can be discharged. Beware, though, that the creditor could file a motion requesting the judge pronounce either type of debt as nondischargeable.
After the Bankruptcy Discharge
Once you have made the final payment in your Chapter 13 plan, you receive the discharge order. This court order essentially wipes out any remaining balances left on qualifying dischargeable debts. It may even wipe out specific debts that typically are not discharged in Chapter 7 bankruptcies.
The court clerk is in charge of mailing the official copies of the final order of discharge to all of your creditors, the bankruptcy trustee, and the trustee’s attorney. You and your attorney should receive a copy in the mail, too. The copy that is sent to your creditors is meant to be a notification that demands creditors terminate all collection actions on the debts listed in your discharge.
Once the discharge order has been mailed to your creditors, you can file a motion in court to sanction a creditor if they continue collection actions against you. Normally, all you would need to do is let the creditor know that the debt has been discharged. However, if the creditor continues to bother you, you are now protected from these behaviors.
Are You Considering Filing For Bankruptcy?
If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.