What does it mean to “discharge” debt?
A discharge of debt means that the debt is legally cancelled. Getting a discharge is the reason to file for bankruptcy. Most kinds of debts are discharged in a normal bankruptcy situation so we usually explain the concept by saying that most debts are cancelled but some are not and we go over what kinds of debts are not discharged. The debts which typically are not cancelled are special kinds of debts, such as child support, alimony, student loans, most income taxes, most student loans and debts relating to fraud, misconduct, intentional injury or crimes. Grounds for denying discharge also include hiding or concealing assets, filing false documents or the loss or destruction of financial records. The typical case does not involve these types of things, but the categories of debts which remain after bankruptcy should be reviewed with a qualified attorney. Also, running up credit just prior to filing bankruptcy is evidence of fraud as is transferring property to friends or relatives hoping to keep them out of the bankruptcy, and this type of behavior should avoided, as should any type of dishonesty or wrongful conduct.
A Chapter 7 bankruptcy is ideal for individuals with enormous unsecured consumer debt, such as credit cards. In a typical Chapter 7 bankruptcy filing, the debtor is allowed to keep important assets such as the home, vehicles, and household contents. However, if the wrong choice is made or the case is not prepared correctly, disastrous consequences may occur. In most instances, the debtor is allowed to keep all of their property. Upon completion of the Chapter 7 bankruptcy filing, most debts are extinguished.
Some people attempt Chapter 7 bankruptcy alone, or with a legal document service. To be sure you are getting the maximum benefit available under the law; you should work with an experienced bankruptcy lawyer.
To learn more about bankruptcy and debt relief, see our Debt Relief section.
Contact our experienced bankruptcy attorneys to discuss your Chapter 7 bankruptcy questions. We offer a free budget analysis and will provide you with a free credit report. Evening and weekend hours are available by appointment.
We are a Debt Relief Agency helping people file for bankruptcy relief under the Bankruptcy Code.