During bankruptcy, debtors can seek discharge for various debts, releasing them from personal liability for specific financial obligations. Creditors also receive permanent restrictions from collecting payments for eligible debts when issued a discharge order. This means their collectors can no longer contact debtors regarding overdue debts.
Discharging debts still follows a specific set of rules based on the type of bankruptcy case, the presence of valid liens and the court’s decisions. This process also happens with proper timing, depending on the flow of court proceedings. Typically, the timing can depend on which chapter the case is under:
- Chapter 7: Usually happens around four months after the debtor files the petition. Still, the court might only grant discharge when the duration for filing complaints, objections and dismissal ends, usually around 60 days after the first 341 meeting schedule.
- Chapters 11, 12 and 13: Discharge typically happens once the debtor fulfills their planned payments. The schedule could vary based on the plan’s details. Sometimes, filing for Chapter 12 or 13 bankruptcy allows plans to last around three to five years. The discharge usually occurs around the fourth year after filing the petition.
Remember that the court may also deny discharge based on the circumstances. If the debtor fails to meet specific conditions in the bankruptcy code, they might lose eligibility.
Additional factors impacting discharge
Sometimes, debtors must complete financial management courses to become eligible for discharge. Other factors could also have an impact, such as the lack of adequate educational programs and the debtor’s qualities. These characteristics may include disabilities, incapacity or if the debtor is on active military duty.
Requirements and conditions can easily complicate the bankruptcy process, making reliable legal counsel necessary. Sound advice can help navigate the process and tackle issues if they arise.
