What Does a Discharge in Bankruptcy Mean?

A discharge in bankruptcy is essentially the end goal of the legal proceeding. When you file for bankruptcy, you are asking the court to forgive the debts that you have accrued. The court will determine whether you are eligible to file for bankruptcy and what type of bankruptcy filing is most appropriate for your financial condition. The court wilI assess your income, your assets, and the type of debts that you hold, and identify the best way to approach the situation. Though not every debt is dischargeable, when those that qualify are discharged by the court it means that you are no longer legally required to pay them and that your creditors are no longer permitted to attempt to collect what you owed them.

A bankruptcy filing is a process that has many steps. While the first thing that happens once your paperwork has been submitted is an automatic stay – which stops your creditors from calling you or seeking repayment – there will be several decisions that need to be made before you receive a discharge in bankruptcy. Many courts will not issue a discharge in bankruptcy until you have taken the required financial management course, and much of the timing of when you receive a discharge of bankruptcy will depend upon whether you have qualified for a Chapter 7 bankruptcy or a Chapter 13 filing. Chapter 7 eliminates dischargeable debts quickly, and you are likely to receive your discharge shortly after your creditors’ time limit for filing a complaint expires. By contrast, if you were required to file under Chapter 13 and submit to a repayment plan, then your debts will not be discharged until all of the payments have been made: this process generally takes three to five years.

The actual discharge in bankruptcy is a court order that is issued to the trustee in the case, the U.S. trustee, all creditors named in the case, and the debtor (and their attorney). It is important to remember that not all debts can be discharged, and though your discharged debts can not be pursued by your creditors, you will still owe payment to those debts that remain. These may include child support payments, tax debts, and monies owed due to personal injury litigation.

If you need assistance or guidance regarding a bankruptcy filing, our attorneys are here to help. Contact us today to set up a time for us to meet.