Bankruptcy can seem like a complicated and intimidating process. If you’re preparing to file for bankruptcy, you probably have questions. Courts and lawyers use a specific set of legal terms that may seem confusing at first. Your Minneapolis bankruptcy attorney may refer to a ‘bankruptcy discharge.’
What is the Definition of a Bankruptcy Discharge?
A discharge describes your goal in filing for bankruptcy—the relief of debt. Discharged debts are cleared from your responsibility. This potentially applies to your unsecured debts. In this state, you are not required to repay them (according to the terms of your specific case as negotiated by your Minneapolis bankruptcy lawyer). Unsecured debt refers to debts such as credit cards, taxes and medical bills.
If you have discharged debts, creditors may not file against you or attempt collection on funds owed. This prevents creditors from sending letters, calling or providing any form of harassment to encourage repayment.
Regarding secure debts (mortgage payments, property liens, car loans) remain. Secured debts may be negotiated or changed during the bankruptcy process or you may be able to pay them on time since the unsecured debt has been eliminated. If you wish to keep assets such as your home or car, notify your Minneapolis bankruptcy law expert.
Can All Debts Become Discharged?
Your debts may be discharged depending on the debt and bankruptcy types. Some debts are exempt from becoming discharged in all instances. Examples include alimony, some taxes, student loans, child support and some legal rulings (such as motor vehicle accident injury-related debts). The type of bankruptcy you should file may depend upon the type of debt you owe.
How Long Does it Take to Have a Debt Discharged?
The discharge process typically occurs about two months after the creditors’ meeting unless the trustee or creditor supplies a rejection. You may find the debt discharge delayed or denied in the event of an objection or if you did not complete certain pre-requisites prior to filing for bankruptcy.
Debt discharges are not usually denied in an individual bankruptcy case. To avoid a denial, work with a lawyer and ensure accurate information on al paperwork. Be sure to meet all deadlines provided by the court. This is especially relevant to paperwork deadlines and required debt management consultation.
Without strict adherence to court guidelines, you may be denied for bankruptcy and your debt will not receive a discharge status. To avoid potential problems, contact a Minneapolis bankruptcy lawyer to assist with the paperwork and overall bankruptcy process. Failure to follow court guidelines could result in failure.
The decision to file bankruptcy is a difficult course—however, it can lead to a great deal of relief and a fresh start. If you’re looking to take the first steps to a new financial future, contact a bankruptcy attorney to begin the process immediately.
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