When filing for bankruptcy, the discharge will allow the debtor relief from the liability of their debts. Simply put, the debts that are discharged they are no longer required to pay. Furthermore, the creditors will be prohibited from taking action against the debtor in an effort to collect the debts. It is important to understand that if a valid lien is not dealt with, it will remain even when debts are discharged.
The discharge can take place at different points of the process and will also vary depending on what form of bankruptcy is filed for. For cases of Chapter 7 bankruptcy, the discharge will often be granted by the court around when time runs out to file an objection for the discharge or for filing a motion to dismiss the case for substantial abuse. This will often be about four months from when the petition is filed with the bankruptcy court. Under Chapter 11, Chapter 12 and Chapter 13, it will often be granted around the time that all payments under the plan have been made. Chapter 12 and 13 allow for long payment terms so the discharge may not be until around four years from the time the case is filed.
In many cases, the discharge is granted automatically and the court clerk will provide the notification. Not all debts will be discharged and those that are can vary. Under the Bankruptcy Code there are also certain types that the government has determined cannot be discharged. In some cases, even if a discharge has been offered, the court can choose to revoke it. For those who are dealing with debt, having these debts discharged can be a significant advantage to help turn your financial situation around. Work with our Long Island bankruptcy attorney to seek the best possible outcome to your filing.