Chapter 7 and 13 Bankruptcy Discharge Cases

The debtor is being released from personal liability for certain specified types of debts, by a bankruptcy discharged. Also, there has to be kept in mind that a bankruptcy discharge can help the debtor to avid paying any debts that are being discharged. Any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts, are being prohibited if the debtor goes for a bankruptcy discharge.

Even more, a valid lien that has not been avoided in the bankruptcy case will remain after the bankruptcy case¸ although a debtor is not personally liable for discharged debts. In order to recover the property secured by the lien, the lien may be enforced by a secured creditor.

An important aspect which has to be taken into consideration is being represented by the fact that, depending on the chapter under which the case is filed, the timing of the bankruptcy discharge varies. Also, there has to be kept in mind that, on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse, the court usually grants the bankruptcy discharge promptly, in a Chapter 7 case. When it comes to Chapter 13 bankruptcy, the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan.

The bankruptcy discharge typically occurs about four years after the date of filing, since a Chapter 13 plan may provide for payments to be made over three to five years. It is important as well to be considered that, if the debtor fails to complete “an instructional course concerning financial management”, the court may deny an individual debtor’s bankruptcy discharge in Chapter 7 or 13 cases.