Discharging Debt Through Bankruptcy
October 10, 2012 By Law Offices Of Jacoby & Jacoby
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When filing for bankruptcy one of the main concerns is the amount of debt that will be discharged; meaning that the individual responsible for it will no longer be required to pay it. Bankruptcy is a federal matter and needs to be filed accordingly. There are different forms of it and they all have their own specifics that will need to be understood prior to filing.
Bankruptcy is a final resort but it can be a huge relief for those that have become hindered and restrained by the amount of debt they owe. There are a number of up sides to filing and one of the main ones if having debts discharged. This releases a consumer from the liability they have in regards to certain forms of debt. Through the discharge they will no longer be legally required to pay the amount and a creditor is restricted from being able to seek collections. This prevents them from continuing phone calls, sending letters or even more legal based action.
Discharge can vary depending on the type of bankruptcy that is filed for. In Chapter 11, 12 and 13, which are more payment plan based, the court will typically allow for it to occur once the payments have been completed. The period of time that is set for Chapter 12 and Chapter 13 is usually three to five years, meaning discharge will likely not take place until after this. For Chapter 7, discharge will typically be given when the time limit runs out for eligibility to file an objection to the discharge and the time limit to be able to file a motion to seek having the case dismissed under grounds for substantial abuse. This usually will be a four month period from the time that original filing has been done with the court clerk. If “an instructional course concerning financial management” is not completed then the court can chose to deny discharge. The discharge will be automatic as long as there is not litigation regarding an objection.
A notice will be sent from the bankruptcy court clerk to the creditors, trustee of the case, their attorney and the U.S. trustee. It is a general informative notice that will not cover the details of which debts were included but will let creditors know that they are unable to take further action for collections. There may be debts which are except and therefore remain even after the others have been discharged. The types of debts that will not be covered have been determined by Congress and these are left out from Section 523(a) of the Bankruptcy Code. It is due to the nature of these debts that they have not been included and they were likely sustained from what the government would deem inappropriate behavior. Chapter 13 has the most items unable to be discharged, while the other forms will have 19 categories that are withheld. These will include areas such as government fines, government funded student loans, compensation owed for a personal injury, spousal support, child support, taxes and those not listed by the debtor.
Debtors may not always be able to seek a discharge and a creditor, U.S. trustee or trustee in the case has the ability to attempt to reject it. The complaint needs to be filed with the bankruptcy court prior to the deadline being reached. Reasons for the court choosing to deny are included in the Bankruptcy Code under section 727(a). If the case goes to trial then it will be up to those objecting to supply the court with proof of the reasons for the complaint. In certain situations it is within the authority of the court to revoke a discharge such as when it has been proven that the debtor withheld information or was fraudulent in how they gained the discharge. For those that are able to retain a discharge, it can be a significant accomplishment that provides a consumer with the means to move out from under the weight of owed expenses.
ABOUT THE AUTHOR: Jacoby & Jacoby
Jacoby & Jacoby is a bankruptcy law firm located in Long Island that looks to provide hope for those that have found themselves in over their head with debt. The firm was established in 1964 and since that time has been a support system and strong advocate to help debtors find relief. They have taken on more than 15,000 bankruptcy cases throughout their more than 50 years of cumulative experience. They are skilled with all forms of bankruptcy filings, as well as seeking alternatives. They do not want to push this decision onto anyone and provide an honest assessment of whether or not it is best to file or explore another option. For experienced assistance with your debt related needs, contact the firm today.
Copyright Law Offices Of Jacoby & Jacoby
More information about Law Offices Of Jacoby & Jacoby
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Discharge can vary depending on the type of bankruptcy that is filed for. In Chapter 11, 12 and 13, which are more payment plan based, the court will typically allow for it to occur once the payments have been completed. The period of time that is set for Chapter 12 and Chapter 13 is usually three to five years, meaning discharge will likely not take place until after this. For Chapter 7, discharge will typically be given when the time limit runs out for eligibility to file an objection to the discharge and the time limit to be able to file a motion to seek having the case dismissed under grounds for substantial abuse. This usually will be a four month period from the time that original filing has been done with the court clerk. If “an instructional course concerning financial management” is not completed then the court can chose to deny discharge. The discharge will be automatic as long as there is not litigation regarding an objection.
A notice will be sent from the bankruptcy court clerk to the creditors, trustee of the case, their attorney and the U.S. trustee. It is a general informative notice that will not cover the details of which debts were included but will let creditors know that they are unable to take further action for collections. There may be debts which are except and therefore remain even after the others have been discharged. The types of debts that will not be covered have been determined by Congress and these are left out from Section 523(a) of the Bankruptcy Code. It is due to the nature of these debts that they have not been included and they were likely sustained from what the government would deem inappropriate behavior. Chapter 13 has the most items unable to be discharged, while the other forms will have 19 categories that are withheld. These will include areas such as government fines, government funded student loans, compensation owed for a personal injury, spousal support, child support, taxes and those not listed by the debtor.
Debtors may not always be able to seek a discharge and a creditor, U.S. trustee or trustee in the case has the ability to attempt to reject it. The complaint needs to be filed with the bankruptcy court prior to the deadline being reached. Reasons for the court choosing to deny are included in the Bankruptcy Code under section 727(a). If the case goes to trial then it will be up to those objecting to supply the court with proof of the reasons for the complaint. In certain situations it is within the authority of the court to revoke a discharge such as when it has been proven that the debtor withheld information or was fraudulent in how they gained the discharge. For those that are able to retain a discharge, it can be a significant accomplishment that provides a consumer with the means to move out from under the weight of owed expenses.
ABOUT THE AUTHOR: Jacoby & Jacoby
Jacoby & Jacoby is a bankruptcy law firm located in Long Island that looks to provide hope for those that have found themselves in over their head with debt. The firm was established in 1964 and since that time has been a support system and strong advocate to help debtors find relief. They have taken on more than 15,000 bankruptcy cases throughout their more than 50 years of cumulative experience. They are skilled with all forms of bankruptcy filings, as well as seeking alternatives. They do not want to push this decision onto anyone and provide an honest assessment of whether or not it is best to file or explore another option. For experienced assistance with your debt related needs, contact the firm today.
Copyright Law Offices Of Jacoby & Jacoby
More information about Law Offices Of Jacoby & Jacoby
View all articles published by Law Offices Of Jacoby & Jacoby
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
