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Helping People Get A Fresh Financial Start to Regain Financial Independence

Helping People Get A Fresh Financial Start to Regain Financial Independence

When filing for bankruptcy, know the facts about a discharge

On Behalf of | Jul 17, 2023 | Bankruptcy

People in and around Indianapolis, and elsewhere, who have reached their financial breaking point and do not know where to turn to clear overwhelming debt may want to consider the benefits of bankruptcy. Whether it is a Chapter 7 liquidation or a payment plan with Chapter 13, a successful bankruptcy filing can help with a financial fresh start and ending the stress and worry that accompanies massive debt.

The entire objective of the filing is to get a discharge. As with many terms that are part of the bankruptcy process, people might be unsure as to what this means in detail. This is when the debts that had led to the endless phone calls, messages from creditors, pressure from debt collectors and fear as to what the future holds are cleared. From the start of the case, knowing what a discharge is and how it works is key.

What should I know about a discharge?

In simple terms, once the debtor is granted a discharge, they are no longer responsible for the debt. For example, if they have significant debt on a credit card, the discharge will clear it and they no longer need to pay.

The chapter under which they file is important as to when they will get their discharge. If it is a Chapter 7, it happens relatively quickly – within a few months in a best-case scenario. In a Chapter 13 where payments are made to a trustee who will in turn distribute payments to creditors, it takes either three years or five years for it to be completed.

After the discharge has been granted, the creditors can no longer contact the debtor about the debt. If they do, they can be sanctioned. In some instances, creditors might object to the discharge. Apart from these situations, the debtor generally gets the discharge automatically upon completing their role in the bankruptcy plan. For Chapter 7, that is simply providing all the necessary information and filing the case. For Chapter 13, it means making the payments on time and in full until the plan is complete.

Discharges can be denied under Chapter 7 if the debtor does not provide the necessary tax information; does not take the financial management course; transfers or conceals property that might be subject to liquidation in trying to defraud creditors; destroys or conceals records; commits perjury; does not account for lost assets; of violates a court order based on a previous discharge. If there is fraud, a discharge can be revoked.

Bankruptcy is an effective solution to debt problems with the right help

One of the understated positive aspects of bankruptcy is giving a person peace of mind. To achieve that, it is important to have experienced guidance that can explain the entire process in terms they can understand. That includes the facts about a discharge.

Consulting with professionals who have more than four decades of combined experience, are patient, examine the entire case from top to bottom and find viable solutions is a fundamental part of every case. Having positive communication throughout the case and getting assistance in eliminating all forms of debt that can be discharged via bankruptcy is essential and can help with reaching a positive resolution.


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