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Obtaining a bankruptcy discharge is the primary reason why individuals file a Chapter 7 bankruptcy case. It is the “fresh start” which allows debtors to move on with their life without the stress and worry caused by unpaid debts. Our experienced bankruptcy lawyers at Weintraub Zolkin Talerico & Selth LLP have more than 100 years of combined experience assisting clients with complicated bankruptcy matters. We are here to listen to your concerns and walk you through the entire legal process to find the best solution for your situation.
What Is a Chapter 7 Discharge?
A discharge is a court order that permanently relieves the debtor from any legal obligation to pay debts which were owed when the case was filed. The discharge is usually entered within four months after the case is filed, although this can sometimes be delayed.
Once a debt has been discharged, the creditor is prohibited from taking any collection action on that debt, including calling, sending letters, or filing a lawsuit. Creditors and lenders can, however, enforce any liens attached to secured debts, such as mortgages and vehicle loans. If payments are not made on these loans, these creditors can still foreclose or repossess property attached to a lien, even after the associated debt has been discharged.
What If Creditors Attempt to Collect Discharged Debts?
If any creditor tries to collect a discharged debt, the debtor can file a motion with the court and have the case reopened. The creditor can be ordered to pay the debtor sanctions if the court finds that the creditor violated the discharge injunction. Usually sending a copy of the discharge order will stop such collection activity, however, if that is not successful, an experienced bankruptcy attorney should be consulted.
Types of Debts that Can Be Discharged
Debts that are usually discharged in bankruptcy include:
- Credit card debts
- Medical bills
- Lawsuit judgments
- Personal loans
- Obligations under a lease or any other contract
- Other unsecured debts
There are some types of debt, however, that cannot be discharged in Chapter 7. These include:
- Domestic support obligations such as alimony and child support
- Fines and restitution orders owed from a criminal or traffic case
- Student loans
- HOA dues which became due after the bankruptcy was filed
- Income taxes which became due in the three years before the case was filed
Important Factors to Consider
There are other less common debts which are also nondischargeable. Additionally, creditors who claim that a debt was incurred by fraud, theft, embezzlement, or willful and malicious conduct can file a complaint against the debtor in the bankruptcy case asking that their debt be ordered nondischargeable. However, this must usually be done within several months after the bankruptcy case is filed.
It is important to note that a debtor’s discharge can also be denied or revoked for making false statements in the bankruptcy Schedules and Statement of Financial Affairs, failing to disclose assets, transferring assets before or during the bankruptcy, or failing to cooperate with the Chapter 7 Trustee in the Trustee’s collection and liquidation of nonexempt assets.
A debtor who has received a discharge is allowed to voluntarily repay any debts which were discharged, including loans from friends and family, however, no creditor is allowed to ask that the debt be voluntarily repaid.
A discharge does not prevent a creditor from collecting the debt against a co-signer on the debt, although co-signer spouses in community property states such as California have certain protections under bankruptcy law.
Consult with Our Seasoned Bankruptcy Team Today
If you want to attempt to discharge your debts by filing for Chapter 7 bankruptcy, then please don’t hesitate to get in touch with Weintraub Zolkin Talerico & Selth LLP to discuss our comprehensive legal services with one of our attorneys. We know firsthand that advance planning with a skilled attorney can make the difference in whether some debts are discharged or not, so stop by or give us a call today.
Hear From People We've Helped
Honesty, Integrity, and Respect for the LawSally C.
Courageous Judicial Officer of the CourtFormer Client
Honor, Compassion, and Zealous Respect for the LawMS
"David Zolkin’s tenacious advocacy restored my faith in the judicial system. He was able to secure an order dismissing the debtor’s case with a permanent bar; something unheard of in bankruptcy. This, in turn, protected my rights as a creditor."Former Client
"We remain incredibly grateful!"Patrick K.
"Jim Selth has always come through in a very professional, timely, and responsible manner."Marc B.
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