Debt discharge is the result of a Chapter 7 bankruptcy filing, and a person filing for Chapter 7 will not be held liable for any more payments on outstanding debts. In a discharge, the court legally bars creditors from further collection efforts, but not all debts can be discharged. Only these types of debt can be eliminated under the rules of Chapter 7:
* Business, medical and credit card debts
* Auto accident judgements
* Debt from leases
* Repossession and tax debts
* Debts arising from negligence claims and other judgements
Some debts cannot be eliminated by filing Chapter 7: some tax debt, debts from criminal restitution and fines, spousal support and child support, DUI and student loan debt, and debts arising from intentional injury by the debtor.
The Other Consequences of Chapter 7 Debt Discharge
The primary effect of a discharge is the elimination of further debt liability, and this is one of the main reasons why Chapter 7 is such a popular choice. Other effects of Chapter 7 discharges include:
* Positive or negative effects on credit history or score
* The requirement to take financial management courses
* A longer waiting period before eligibility to file for Chapter 7 again (usually eight years after the first filing)
What if a Creditor Attempts to Collect a Discharged Debt?
If one of your creditors tries to collect on a previously discharged debt, they face serious legal consequences and heavy fines. Court discharge orders are final, and work in much the same way as an injunction, protecting you from any further attempts at collection. A Chapter 7 bankruptcy discharge also prohibits your creditors from communicating with you about discharged debts.
Denial or Revocation of Chapter 7 Discharge
Courts can deny petitions for discharge if a debtor:
* Fails to provide necessary documentation
* Fails to complete financial management courses
* Defrauds creditors by transferring or concealing property
* Commits perjury or other crimes during the bankruptcy process
A bankruptcy court can also revoke a discharge if it was fraudulently obtained.
Hiring a Lawyer for Help with a Chapter 7 Debt Discharge
A Chapter 7 bankruptcy’s effects are long-lasting and far-reaching. If you need help with a debt discharge, you should call a lawyer at Lewis Adams. Your Bankruptcy Lawyer in Salt Lake City can help you fill out and submit the necessary paperwork, and they can represent you during court proceedings.
