What Is A Discharge?

For many, the goal of a bankruptcy is to receive a discharge of debt. Which begs the question, what is a discharge? A discharge is a forgiving of debt granted by order of a Federal Bankruptcy Court. Not all debts are eligible for discharge. Some debts have been labeled priority debts. For public policy reasons, these debts may not be discharged by the Federal Courts. Most common examples of these priority debts are: taxes, student loans, child support and certain types of criminal restitution.

Secured debts do not receive discharge. The most common secured debts would be homes and vehicles. These debts are either reaffirmed in which case the debtor keeps the property and continues to make the payments as scheduled or surrendered, in which case the debts are forgiven in exchange for the property being returned to the lender.

Un-secured non priority debts such as credit cards, lines of credit, doctors, lawyers, medical, unpaid rent, eviction or utility arrearage and the like are capable of receiving a full discharge in a Chapter 7 bankruptcy filing.

In a Chapter 13, discharge of debt is only available after the successful completion of a Chapter 13 plan. A Chapter 13 plan can last anywhere between 3-5 years depending upon the particular circumstances of your case.

In a Chapter 7, those debts not entitled to a discharge simply survive the bankruptcy. In many instances, in a Chapter 13 bankruptcy those debts not entitled to a discharge must be paid back in full through the life of the plan. This would include most commonly: taxes, governmental debts and child support arrears.

If you have questions or concerns regarding the discharability of certain debts that you possess I encourage you to call Morse Law at (303) 300-6684. By calling you can schedule a free initial consultation during which an experienced attorney will be able to sit with you, analyze your situation and determine the dischargability of your debts specific to the chapter of bankruptcy you most prefer filing.

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