Bankruptcy Law Firm

SMARTblog Website

  • About Us
  • Blog
  • Chapter 7
  • Chapter 13
  • Testimonials
  • Contact Us
You are here: Home / Discharge of Debts / The Discharge of Your Debts under Chapter 7

The Discharge of Your Debts under Chapter 7

December 15, 2014 by Mikel Erdman

The primary goal of filing a Chapter 7 “straight bankruptcy” is to “discharge”—legally write off—your debts. So, how does this happen?

 

Here’s how the discharge of debts works:

1. You will almost always receive a general discharge of your debts in a Chapter 7 case. The discharge will usually apply to many, and sometimes even to all, of your debts. You just need to cooperate with the bankruptcy laws. According to Section 727 of the Bankruptcy Code, the bankruptcy court “shall grant the debtor a discharge” except in some relatively unusual circumstances:

  •  
    • You have to be an “individual” to get a discharge.  Corporations and other kinds of business entities do not receive a discharge of debts, only actual people do!
    • You can’t get a discharge if you have already received a discharge too recently in a prior bankruptcy case. Specifically, you won’t get a new discharge of your debts in a Chapter 7 case if:
      • you already received a discharge of debts in an earlier Chapter 7 case filed no more than 8 years before your present case was filed, or
      • you already received a discharge of debts in an earlier Chapter 13 case filed no more than 6 years before your present case was filed (except under limited conditions).
      • If you hide or destroy assets, or conceal or destroy records about your financial condition.
      • If you make a false oath or withhold information or records about your property or financial affairs, in connection with your Chapter 7 case.

2. Each one of your debts will be discharged, except for those which fit a specific exception stated in the law. Section 523 of the Code lists those “exceptions to discharge.” The main ones include:

  •  
    • recent income taxes
    • debts incurred through fraud or misrepresentation, such as most bounced checks, and those credit card cash advances and purchases done while intending not to pay the debt
    • debts not listed on time on the bankruptcy schedules
    • money owed because of embezzlement, larceny, or through other kinds of theft or fraud in a fiduciary relationship
    • child and spousal support
    • claims against you for intentional injury to another person or property
    • most but not all student loans
    • claims against you for causing injury or death to someone by driving while intoxicated

3. A discharge from the bankruptcy court stops a creditor from ever attempting to collect on the debt. Under Section 524 of the Bankruptcy Code, the court’s discharge order acts as an injunction against the creditor from taking any action, on its own or through a court procedure, to “collect, recover, or offset any such debt.” If a creditor violates this injunction by trying to pursue a discharged debt, the bankruptcy court may hold the creditor in contempt of court and, depending on the seriousness of its illegal behavior, can require the creditor to pay the debtor damages. 

 

Filed Under: Discharge of Debts Tagged With: bounced checks, Chapter 7, Chapter 7 bankruptcy, discharge of debts, fraud, nondischargeable debts

Avatar

About Mikel Erdman

Mikel Erdman is the founder of MySMARTblog and RealtyBlogContent. He is a published author and speaking authority on topics including marketing automation and how technology can positively affect company and individual sales efforts.
If you like the idea of world-class content marketing in a completely automated system, Click Here for his valuable, limited time offer.

Contact Information

Bankruptcy Law Firm
1000 E. Law St.
Cash, California 55555
Business: 123-456-7891
Day Hours
Monday 9:00 AM to 5:00 PM
Tuesday 9:00 AM to 5:00 PM
Wednesday 9:00 AM to 5:00 PM
Thursday 9:00 AM to 5:00 PM
Friday 9:00 AM to 5:00 PM
Saturday Closed
Sunday Closed

Our Clients Words

Michael's service is second to none. I'm fortunate to have selected his firm to represent us in this serious matter.
— Clyde Drexler

I've had so much fun as a judge on American Idol this year. I just hope the censors let me back on so I can sing, sing, sing!
— Steven Tyler

I love baseball, apple pie and Chevrolet. By the way, I'm hitting it straight outta this park!
— Babe Ruth

It's been a wild trip so far. I can't wait to see what's right up around the corner. Thanks for the surprises!
— Terry Bradshaw

Recent Posts

  • Bankruptcy Helps You Sell Your Home
  • More Bankruptcy Advantages with the Foreclosure Moratorium
  • Bankruptcy Advantages with the Foreclosure Moratorium
  • Short Extension to Foreclosure Moratorium
  • Student Loan Moratorium Extended through September 2021

Archives

March 2021
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031  
« Feb    

Copyright © 2021 · Powered by MySMARTblog