Bankruptcy filing for debt relief is not as bad as it seems. For some people, to be able to pay back what is owed to lenders and wipe out debts is the only way to have a fresh start financially. Our law firm has processed countless of bankruptcy cases, and for good reason. If you are planning to file for bankruptcy or if you are reading for preliminary bankruptcy information, you need to know what a discharged debt means.

A bankruptcy discharge refers to the court order that officially releases you from specific debts after declaring either a Chapter 7 or Chapter 13 (referring to the specific bankruptcy case). Generally, you would not have to repay creditors if what you owe from them has been discharged. That is, with no risk of getting sued.

Bankruptcy discharges prevent debt collectors from asking for repayment for outstanding debts. Specifically, in bankruptcy Chapter 13, this takes place once all one-time or monthly payments set out in the payment plan have been completed by the debtor. If you file bankruptcy under Chapter 7, such is granted about four months after the bankruptcy petition, as long as no objections are filed. Getting legal help from an experienced bankruptcy lawyer will ensure that you make the most out of this.

Note that under bankruptcy law, not all debts can be discharged. If you filed for bankruptcy and all paperwork are accomplished, you may be eligible to have some of the following discharged:

  • Medical bills
  • Credit card debt
  • Unsecured debt
  • Debts incurred as a result of an injury
  • Tax debt (but not all types)

Bankruptcy DischargeDepending on the type of bankruptcy, the following types of debts likely cannot be discharged:

Filing for bankruptcy under Chapter 7

  • Fines
  • Student loans
  • Secured debt
  • Child support and alimony
  • Mortgage payment
  • And others

Filing bankruptcy under Chapter 13

  • Criminal fines
  • Student loans
  • Certain tax debt
  • Child support and alimony
  • Mortgage payment
  • Debt resulting from the death or personal injury (while DUI)

The following may be discharged unless the creditor files a motion requesting that it be declared non-dischargeable:

  • Debt from fraudulent activities
  • Judgment from civil court

As in bankruptcy laws, these lists are not exhaustive. If you do decide to declare bankruptcy, get legal aid from experts in to make sure you are doing so correctly.

The bankruptcy court will send the discharge notice to your creditors and bankruptcy trustee (a trustee generally oversees the payments of a bankrupt individual). Generally, no lender should be contacting you for payments after this. However, in the case of a loan involving a lien on your home or vehicle, such a secured creditor could repossess the said property. Your bankruptcy attorney can help you avoid such repossession or foreclosure.

Choosing to file a bankruptcy case is not something you should immediately turn down because of the stigma. Declaration of bankruptcy is, first and foremost, a legal issue. For a lot of people, the bankruptcy process allowed them to get back on track in terms of finances.

Know that you are not alone in this endeavor. A good bankruptcy attorney in California can help you with the different types of bankruptcy, the actual bankruptcy procedure, and what you should look forward to after bankruptcy. Contact the Law Offices of Daniela Romero for assistance.