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3 Things To Understand About The Chapter 7 Discharge

by Lewis Hamilton

The discharge in Chapter 7 bankruptcy is the one thing that makes bankruptcy a great way to find relief from debt, as it is the part of a case that eliminates your obligation to any debt that qualifies for this. If you are planning on using Chapter 7, you should understand what a discharge is and how it works. Here are three things that are important to know.

The types of debts that qualify

A discharge is a huge advantage of using Chapter 7 bankruptcy, but it has limits. You cannot expect to receive a discharge for every debt you have, unless every debt qualifies. Your lawyer can help you understand what it takes for a debt to qualify, and a simple rule of thumb is that if the debt is unsecured, it will qualify. This, however, is not 100% true all the time. The main types that will usually qualify include medical bills you owe, credit card debts, and personal loans. If you have these types of debts and choose Chapter 7, there is a good chance you will receive a discharge for them through your case.

Reasons the court may deny a discharge for qualifying debts

There is also a chance, though, that the court will deny a discharge for debts that would typically qualify for a discharge. One reason the court may do this is if you were not honest with your paperwork and lied about certain debts. The court may also deny a discharge if you racked up credit card debts just before filing, simply as a way to get more stuff without having to pay for it. Courts can also deny discharges if a person fails to file the right documents or tries to hide assets they own.

A discharge offers protection in the future

The other thing to know is that if you receive a discharge for a specific debt, your bankruptcy case will offer protection for that debt in the future. In other words, a creditor cannot come after you to collect for that debt if the court discharged it. This is protection you will have for the rest of your life through a Chapter 7 case.

If you feel that bankruptcy is the best way for you to regain control of your finances, talk to a lawyer. A lawyer can inform you of how it works and how it would affect you, and you can talk with a lawyer by setting up an appointment with a bankruptcy law firm.

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