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The debt discharge process in Chapter 7 bankruptcy

The debt discharge at the end of the bankruptcy process is one of the most important parts of the personal bankruptcy process because it provides relief from debt and allows the filing party to enjoy a fresh financial start. As a result, filing parties and parties considering filing for bankruptcy should understand the details of the debt discharge.

The debt discharge comes at the end of any type of personal bankruptcy process. In circumstances of a Chapter 7 bankruptcy, a debt discharge is granted in 99% of cases. The debt discharge is important because it releases the filing party from personal liability for most debts and it also prevents creditors from taking collection action against the filing party for those debts. The debt discharge is typically granted 60 to 90 days following the scheduling of the first meeting of the creditors.

There are exceptions to a Chapter 7 debt discharge so it is useful for filing parties to be familiar with what those are and ensure they are educated about the process, what to expect and what it means. There are also different reasons that a debt discharge may be denied that filing parties should also be familiar with during their Chapter 7 bankruptcy process. In addition, there are certain types and categories of debt that cannot be discharged during the Chapter 7 bankruptcy process that filing parties will also want to be aware of. Certain debts may be subject to reaffirmation and, if there was fraud, reinstatement of debts is also possible. Filing parties also have protections against creditors seeking to collect discharged debts.

There are a variety of complexities associated with Chapter 7 bankruptcy and the debt discharge process but it can be worth it to understand what they are and work through them to enjoy relief from debt that personal bankruptcy protections can provide. Those struggling with debt should know that there are legal resources available to help them during a difficult financial time.

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