What is a Chapter 7 Discharge?
Posted By
Majed on Apr 26, 2010 7:00am PDT
If the goal of a consumer bankruptcy filing is to start afresh with a clean slate, then a discharge is the manifestation of that goal. A discharge means that a debtor is no longer legally responsible for the repayment of a debt. Once a judgment of discharge is entered a creditor is prohibited from debt collection attempts, including phone calls, wage garnishment and lawsuits.
A judgment of discharge is not immediate. Once a debtor files for Chapter 7 there is a waiting period which gives creditors an opportunity to object to the discharge or raise any issues before the court. This waiting period is typically 60 days following the first date set for the creditors meeting. Additionally, the debtor is expected to complete a financial management course and timely file a list of assets and a statement of financial affairs.
Once the time period has passed with no issue and the debtor has filed all appropriate documentation with the court, a discharge will be issued. A copy of this order is mailed to the debtors, as well as the trustee, any attorneys involved and all creditors. Creditors are noticed that the debtor has been discharged of the debt and that any further debt collection activity is prohibited. It also notes that continued debt collection activity is subject to punishment.
Most debt is dischargeable under Chapter 7. However some typical exceptions include student loan repayment, child support or alimony and some legal judgments.
Keep in mind that these are the results of a typical Chapter 7 case. Facts and circumstances vary, so it is always wise to seek the knowledge and experience of a veteran bankruptcy attorney to ensure that you can reap all of the benefits of Chapter 7. For more complex questions, feel free to contact a skilled Fears | Nachawati attorney to guide you through this process.