Your bankruptcy discharge order will permanently wipe out certain dischargeable debts. While the automatic stay in bankruptcy will temporarily prevent creditors from calling or attempting to collect payment on your debts, the bankruptcy discharge actually eliminates the underlying debt and stops your creditors from taking any collection actions for good.
How to Get a Bankruptcy Discharge
In a Chapter 7 bankruptcy case, the bankruptcy discharge will typically be given after the expiration of the time period for creditors to object to your discharge. If none of your creditor’s objects, you will be discharged for most of your unsecured debts.
In a Chapter 13 case, you will not receive a discharge until after you have made all of your plan payments. This generally takes three to five years.
What does it mean to receive a discharge?
- You are no longer responsible for paying off the discharged debts, and
- Your creditors are legally prohibited from taking any action to collect the discharged debts
However, not all debts can be discharged through bankruptcy. Certain debts are not discharged because bankruptcy laws have given these debts special protections, and other debts are secured by liens that survive a bankruptcy discharge.
Debts That Are Discharged in Bankruptcy
Unsecured debts that are not given special priority by bankruptcy laws can generally be discharged. This includes the following types of debt:
- Credit card debt
- Medical bills
- Payday loan debt
- Debts from promissory notes
- Past due utility bills
- Other debts that are not given special protection by bankruptcy law
While bankruptcy will discharge most debts, it will not affect the validity of a lien on your property. If a creditor has a security interest in a specific piece of your property, they will still be able to use this lien to enforce the debt after the bankruptcy discharge. If you want to eliminate secured debt, you will have to surrender the property to the creditor.
Other debts are nondischargeable even when no security interest exists. These debts include:
- Child support and alimony
- Some tax debts
- Debts due to someone’s death or injury caused by your intoxicated driving
- Fines you owe for breaking the law
Student loan debt is also nondischargeable unless you can prove that a hardship exception should apply.
Before you file bankruptcy, be sure to talk to a bankruptcy attorney about which debts you may be able to have discharged.
Bankruptcy is a complex and nuanced area of law. Contact the Law Office of Barbara B. Braziel to talk about your unique financial situation and how a bankruptcy could help you.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.