Bankruptcy Information





Bankruptcy in Brief a service of the Moran Law Group What does discharged mean? The goal of a bankruptcy proceeding is to obtain a discharge of debts When a debt is discharged it is no longer enforceable against the debtor personally When you have personal liability for a debt a creditor with a judgment can use legal processes like levy and garnishment to reach your non exempt assets and earnings even though those assets were not pledged as and the debt was The bankruptcy discharge eliminates the debtor's personal liability for a discharged debt Liens or in rem liability Even though personal liability is discharged most the liability of an item of property for a debt secured by that property pass unaffected through bankruptcy unless a court order modifies or voids them See So after a bankruptcy discharge a lien may remain a charge on an asset the debtor owned when the case was commenced but that debt cannot become a lien on any assets that the debtor acquires after the bankruptcy discharge Illustrations A home equity loan remains as a lien on the real property after a bankruptcy discharge If the loan is not paid the lender cannot

Bankruptcy Discharge One of the major purposes of bankruptcy legislation is afford the opportunity to a person hopelessly burdened with debt to erase his or her debt and thereby get a fresh financial start A bankrupt's debt is erased when he or she is discharged WHEN IS A BANKRUPT DISCHARGED? The debtor is discharged months after bankruptcy is filed At that time all debts are written off More than of the bankrupts are discharged WHAT DEBTS ARE NOT ERASED BY A BANKRUPTCY? The following debts are not erased in both Chapter and Chapter If you file for Chapter these will remain when your case is over If you file for Chapter these debts will have to be paid in full during your plan If they are not the balance will remain at the end of your case Debts you forget to list in your bankruptcy papers unless the creditor learns of your bankruptcy case Child support and alimony Debts for personal injury or death caused by your intoxicated driving Student loans unless it would be an undue hardship for you to repay Fines and penalties imposed for violating the law such as traffic tickets and criminal restitution and Recent

What is bankruptcy? Bankruptcy is a legal proceeding in federal bankruptcy court by which a person who has more debts than he or she can pay seeks relief from those debts The right to file a bankruptcy exists under the law and this law was designed mainly to take care of serious problems with debts and to allow a fresh financial start The most common type of bankruptcy is straight bankruptcy You may also hear it referred to as a Chapter or liquidation proceeding A person who files for bankruptcy relief is referred to as a debtor In a straight bankruptcy a trustee sells the debtor's property and uses the sales proceeds to pay creditors The result of a successful bankruptcy proceeding is a discharge in bankruptcy which releases the debtor from payment of affected debts Most of the information in this pamphlet deals with a straight bankruptcy proceeding There is also a special type of bankruptcy called Chapter bankruptcy It is also sometimes referred to as a wage earner plan although it is available to persons on welfare or with other kinds of regular income In a Chapter plan a person continues to pay off debts under an

LAWDOG BANKRUPTCY CHAPTER Discharge And Dismissal LAWDOG is intended to assist in the understanding of basic concepts See Disclaimer Always obtain legal advice from legal professionals DISCHARGE A discharge generally relieves a Chapter debtor from all debts incurred prior to the filing of the bankruptcy A creditor is permanently prevented from attempting to collect such debts from the debtor or the property of the debtor However under certain limited and specific circumstances prescribed under the Bankruptcy Code the court may deny a discharge to the debtor or may declare certain debts nondischargeable Bankruptcy Code Section lists grounds under which a Court may deny a discharge to an individual debtor in a Chapter case Grounds include that the debtor transferred removed destroyed or concealed property of the debtor or estate failed to keep or produce adequate books or records failed to satisfactorily explain an asset loss committed a bankruptcy crime or failed to obey a lawful order Where a prior Chapter discharge was granted or denied within the last years or where the debtor completed certain prior chapter plans the debtor may not be entitled to a discharge in a second Chapter bankruptcy Discharge is ordered for individual debtors only

Discharge in Bankruptcy The Discharge in Bankruptcy Public Information Series of the Bankruptcy Judges Division Administrative Office of the United States Courts October While the information presented herein is accurate as of the date of publication it should not be cited or relied upon as legal authority This information should not be used as a substitute for reference to the and the both of which may be reviewed at local law libraries or to local rules of practice adopted by each bankruptcy court Finally this fact sheet should not substitute for the advice of competent legal counsel From an individual debtors standpoint one of the primary goals of filing a bankruptcy case is to obtain relief from burdensome debt Relief is attained through the bankruptcy discharge the purpose of which is to provide a fresh start to the honest debtor The bankruptcy discharge varies depending on the type of case a debtor files chapter or Bankruptcy Basics attempts to answer some basic questions about the discharge available to individual debtors under all four chapters including What is a discharge in bankruptcy? When does the discharge occur? How does the debtor get a discharge? Are all the debtor's debts discharged



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