When Are Debts Discharged in a Bankruptcy Case?
Filing for bankruptcy can relieve financial stress and give debtors a fresh, new start – but what many debtors do not realize is that the obligation to one’s creditor remains in effect until the debts are legally discharged. What is a bankruptcy discharge, when does it occur, and is there anything that debtors can do to expedite the process? The following information explains, and it describes where you can find assistance for your Illinois bankruptcy case.
What is a Bankruptcy Discharge?
A discharge in bankruptcy is a legal and permanent order that releases the debtor from any further obligation to the creditor. It also prohibits the creditor from contacting the debtor (i.e., email, phone, mail, or in-person) and they can no longer use legal actions to collect the debt (i.e., wage garnishment, intercepting tax refunds, etc.). It is important to note that discharge does not stop a creditor from repossessing or recover property with a valid lien (i.e., homes, vehicles, etc.). Some debtors may be permitted to work out an arrangement with their creditors to keep an asset. Others may be permitted to keep certain exempt assets. An experienced attorney can help determine if you may be eligible for either of these options.
When Does Discharge Occur?
The timing of a discharge depends upon the chapter under which the debtor files. For chapter 7, or liquidation, the debts are usually discharged by the courts once the period for filing a complaint or objection has expired (typically 60 days after the first 341 meeting is scheduled). In chapter 13, the debts are not discharged until the debtor has met all their payment obligations under their repayment plan. From there, the courts discharge the debts as soon as reasonably practical.
Debtors should understand that not all debts may be discharged in bankruptcy. Certain loans – particularly those issued by the government (i.e. student loans) may be ineligible for discharge. Child support, tax debts, and other legal obligations may also be ineligible for discharge. For help dealing with such debts, and to gain a better understanding of what your bankruptcy process might look like, contact an experienced attorney for assistance.
Our DuPage County Bankruptcy Attorneys Can Help
Debtors who must file for bankruptcy need more than just someone to process paperwork. They need an advocate that understands their situation and is willing to go the extra mile to ease the stress and worry of financial devastation. Davi Law Group, LLC is just that firm. Dedicated and experienced, our DuPage County bankruptcy lawyers can examine your situation, explain your options, and take swift and immediate action to improve your circumstances. Schedule a personalized consultation by calling 630-580-6373 today.