18 Feb 2010 01:29 pm
Explanation of bankruptcy discharge in a chapter 7 case
This information is only a general summary of the bankruptcy discharge. There are exeptions to these general rules. Because the law is complicated, you should ALWAYS consult an attorney to determine the exact effect of the discharge in case.
Collection of Discharge Debts Prohibited
The discharge prohibits any attempt to collect from the debtor a debt that has been discharged. For example, a creditor is not permitted to contact a debtor by mail, phone, or otherwise, to file or continue a lawsuit, to attach wages or other property, or to take any other action to collect a discharged debt from the debtor. A creditor who violates this order can be required to pay damages and attorney’s fees to the debtor.
A creditor may have the right to enforce a valid lien, such as mortgage or security interest, against the debtor’s property after the bankruptcy, if that lien was not avoided or eliminated in the bankruptcy case. Also, a debtor may voluntarily pay any debt that has been discharged.
Debts That are Discharged
The chapter 7 discharge order eliminates a debtor’s legal obligation to pay a debt that is discharged. Most, but not all, types of debts are discharged if the debt existed on the date of the bankruptcy case filed.
Debts that are NOT Discharged,
Some of the common types of debts which are NOT discharged in a chapter 7 bankruptcy case are:
- Debts for most taxes;
- Debts incurred to pay non-dischargeable taxes;
- Debts that are domestic support obligations;
- Debts for most student loans;
- Debts for most fines, penalties, forfeitures, or criminal restitution obligations;
- Debts for personal injuries or death caused by the debtor’s operation of a motor vehicle, vessel, or aircraft while intoxicated;
- Some debts which were not properly listed by the debtor;
- Debts that the Bankruptcy court specifically has decided or will decide in this Bankruptcy case are not discharged;
- Debts for which the debtor has given up the discharge protections by signing a reaffirmation agreement in compliance with the Bankruptcy Code requierements for reaffirmation of debts; and
- Debts for federal employees for certain types of loans from these plans.
This information is only a general summary of the bankruptcy discharge. There are exeptions to these general rules. Because the law is complicated, you should ALWAYS consult an attorney to determine the exact effect of the discharge in case.
If you are experiencing financial difficulties, being harassed by creditors, have credit card debt, unpaid medical bills, repossession (s), pending lawsuits, judgments or are being on your mortgage or rent payments, then a Chapter 7 or a Chapter 13 filings may be of great benefit to you.
Make an appointment for a Free Consultation in Nothern New Jersey.
Related posts:
- New Jersey Bankruptcy- Should I File Chapter 7 or Chapter 13?
- Bankruptcy Lawyer – Why Do You Need One?
- What Is Chapter 7 Bankruptcy?
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