A bankruptcy discharge is one of the most common reasons for filing for bankruptcy. A discharge releases you from personal liability for debts that qualify under federal law. It is a permanent order granted by a bankruptcy court. Any debts you successfully discharge in bankruptcy will basically disappear and your creditors can never come after them again.
A discharge is granted at the end of your case. If you file for Chapter 7, that is only a matter of days or months. In Chapter 13, it will be at the end of successful completion of your payment plan, which is typically at the end of 3 or 5 years.
However, not all debts are dischargeable. Secured debt, which is generally a debt where your creditor has the right to repossess something in the case of late payment, is not dischargeable. For most people, this may apply to a home or a car. There are other potential alternatives for management of these kinds of debts in bankruptcy, such as redemption, reaffirmation, or other methods, that can be discussed with a qualified bankruptcy attorney.
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Tags: Bankruptcy Discharge, Discharge
Posted July 19, 2011 by Imogen Lay under Credit Report