A bankruptcy discharge is a court order that releases someone from their obligation to pay a debt. This often occurs at the end of the bankruptcy process, since getting debts discharged is essentially the point of going through all of this in the first place. If you are ready to discharge some of your debt, a New City, New York bankruptcy attorney from our firm can help you.
What Happens After a Bankruptcy Discharge?
After a bankruptcy discharge, your obligation to repay certain debts has ended. Your bankruptcy plan, whether you reorganized under Chapter 7 or Chapter 13, has been accepted by the court.
This means that creditors can no longer try to take action to collect on these debts. They cannot attempt to take legal action nor can they communicate with you and tell you that you still need to pay. If a creditor does anything like this after a discharge, they can be reported to the court and sanctioned.
Many types of debt can be discharged during bankruptcy. Commonly wiped debts include:
- Credit card debt
- Medical expenses
- Rent that is past due
- Debt owed to utility companies
- Some types of tax penalties
This is not an exhaustive list, and changes to laws and regulations can make other types of debts dischargeable for some people. As an example, student loan debt usually cannot be discharged, but some are now able to clear it from their record if hardship can be proven. A bankruptcy attorney from our firm can help you learn more about which kinds of debts can be discharged through this process.
What is the Difference Between a Discharge and a Dismissal?
You want a discharge. You do not want a dismissal. A discharge happens when your bankruptcy arrangement is accepted and you meet the requirements outlined by that plan. A dismissal occurs when the court decides that your bankruptcy arrangement is not suitable and your debt should not be discharged. This can occur when:
- You do not have enough assets to repay debts in Chapter 7 bankruptcy
- You have not taken a credit counseling course
- Your income is too high
- You committed fraud because you never intended to pay your credit card bills
Are There Any Debts That Cannot Be Discharged?
There are actually many types of debt that cannot be wiped away in bankruptcy proceedings. So it is important to consult a lawyer and look at what kinds of debts you are dealing with to see if filing for bankruptcy will be worthwhile. You will not be able to discharge debts like:
- Child support
- Car loans
- Court costs
- Criminal penalties
- Many kinds of tax obligations
- Fees owed to a homeowner’s association or condo board
If you are not sure which of your debts can be cleared through bankruptcy, consult with our attorneys.
Contact a Knowledgeable Bankruptcy Attorney
If you are ready to get creditors off your back and rebuild your financial life, we can help. Contact the Lauterbach Law Firm and learn more about the bankruptcy process and what we can do to guide you through it.