The Chapter 7 Debt Discharge & YOU
How Chapter 7 Bankruptcy May Eliminate Debts
After you and your bankruptcy attorney have successfully filed the proper forms and completed the necessary Chapter 7 bankruptcy filing requirements, you may receive a Chapter 7 bankruptcy debt discharge.
This debt discharge clears you from your unsecured debts that were successfully included in your bankruptcy filing. You will no longer be legally obligated to pay any of the debts that have been discharged—and creditors can’t harass you any longer!
Throughout this page, the Chapter 7 debt discharge is explained in greater detail; for even more information on how Chapter 7 bankruptcy may discharge your debts, let Chapter7.Me connect you with a local bankruptcy lawyer.
Simply fill out our free bankruptcy case evaluation form or call 1 (888) 632-0501, and we’ll quickly get to work connecting you with a local bankruptcy attorney from our nationwide network of sponsoring bankruptcy attorneys.
Imagine Being Free of Your Credit Card Debt—It Could Happen Sooner Than You Think
If you decide that Chapter 7 bankruptcy is the right choice for you, you could receive your Chapter 7 debt discharge in just a few months. In fact, the entire Chapter 7 bankruptcy filing process typically takes only a few months—and then you could be on your way to financial freedom!
Visit Chapter7.Me’s Chapter 7 Timeline section for a rundown of the Chapter 7 bankruptcy process.
The Chapter 7 Debt Discharge Defined
A Chapter 7 bankruptcy debt discharge releases a debtor from personal liability for the unsecured debts that were at issue. Once the debts are discharged, the person is no longer required to pay on the bills.
In most cases, unless a company or person files a complaint against the debt discharge, the bankruptcy court will issue the Chapter 7 debt discharge date about 60 to 90 days after the meeting of the creditors.
Are Any of Your Debts Not Subject to the Chapter 7 Discharge?
Some types of debts aren’t extinguishable through the Chapter 7 debt discharge. There may be exceptions for certain circumstances but, in general, the following types of debts are not discharged through Chapter 7 bankruptcy:
- student loans;
- owed taxes;
- child support;
- alimony;
- court-ordered restitution, fines, fees and penalties;
- debts acquired through fraud; and
- any debts from creditors not listed on the previously filed Chapter 7 bankruptcy papers.
It should also be noted that a Chapter 7 bankruptcy debt discharge does not automatically discharge a co-debtor’s or guarantor’s liability for the debt.
Chapter 7 debt discharge also doesn’t have any affect on liens.
For example, if a person owes a bank $10,000 and the debt is secured by the debtor’s car, which is worth $6,000, the debt discharge doesn’t extinguish the bank’s security interest. This means the bank may still repossess the car. However, the person is provided protection under the discharge and would no longer be responsible to pay the $4,000 difference.
Filing Chapter 7 Bankruptcy & Non-Exempt Property
It’s important to know that in some states you’re allowed to keep your car after a debt discharge. Even if your state doesn’t specifically state that you can keep your car after a discharge, in all 50 states you can file to reaffirm your secured debt (such as your car). The reaffirmation agreement is a tool that may allow you to keep your secured property after a Chapter 7 debt discharge is granted.
Because regulations vary and Chapter 7 debt discharge is subject to many exceptions, it may be a good idea to consult with a local bankruptcy lawyer if you’re considering filing bankruptcy.
Can Your Chapter 7 Debt Discharge Be Denied?
In most cases, debtors are approved to receive their Chapter 7 debt discharge. However, there are some cases where a debtor may be denied a Chapter 7 debt discharge, such as if he or she:
- made fraudulent claims in bankruptcy court proceedings;
- made fraudulent property or monetary transfers during the Chapter 7 bankruptcy process;
- didn’t comply with certain Chapter 7 requirements; or
- received a debt discharge within the last nine years.
Although it’s rare that a debt discharge is denied, it can happen. A bankruptcy lawyer can help you file the proper documents to help prevent this from happening.
Imagine Saying Goodbye to Your Stacks of Collection Letters!
Upon filing bankruptcy, an automatic stay will be entered by your bankruptcy trustee.
The automatic stay is a permanent court order that prohibits creditors from contacting you or taking any form of collection action on the discharged debts.
There should be no more calls from creditors at all hours of the day—your phone and mailbox can be yours again after your Chapter 7 debt discharge!
Speak to a Local Chapter 7 Bankruptcy Lawyer about the Chapter 7 Debt Discharge
As we mentioned earlier, there are exceptions to the Chapter 7 debt discharge. Many individual factors come into play when you file bankruptcy and every case is unique. Consider having a bankruptcy attorney on your side who knows your personal case and can make the U.S. Bankruptcy Code work for you.
Take action and connect to a bankruptcy lawyer by filling out our free bankruptcy evaluation form or by calling 1 (888) 632-0501.
The above synopsis of bankruptcy laws is by no means all inclusive
and is not intended to provide legal advice. These laws may have
changed since our last update and there may additional laws that apply
in your situation. For the latest information on these bankruptcy laws,
please contact a bankruptcy lawyer in your area.