File Personal Bankruptcy

When you are filing personal bankruptcy, especially if you are considering representing yourself, there are certain key terms you need to familiarize yourself with. Today we are going to answer the question: What is a discharge when filing personal bankruptcy.

Bankruptcy Discharge Defined

A bankruptcy discharge is the act of releasing the debtor (which would be the person filing) from personal liability for specific debts that have been listed and qualified. When debts are discharged, the debtor or filer is no longer required to make any payments for the debt. The creditor, at that point, can no longer take any type of collection action to satisfy the debt. The creditor must cease all communication related to the specified debt and the matter is considered dead or satisfied.

With discharged debts, although the debtor is no longer personally responsible for the debt, any valid lien upon property in order to secure the debt, will remain active after the bankruptcy.

At What Point During Process of Filing Personal Bankruptcy Does the Discharge Occur?

Depending on the particular chapter of bankruptcy that is filed, the timing of the discharge process varies. When filing personal bankruptcy under chapter 7, the court will generally grant the discharge as soon as the deadline for filing an objection to the discharge has been reached. This generally occurs approximately four months after the filing date of the bankruptcy petition. If the debtor fails to complete the required financial management course, the discharge may be denied.

For chapter 11 cases, the court normally grants the bankruptcy discharge once the debtor has completed all payments under the bankruptcy plan. Since bankruptcy payments can stretch anywhere from three to five years, the discharge under this filing process generally occurs about four years from original filing date.

Can a Bankruptcy Discharge be Revoked?

There are certain instances in which a bankruptcy discharge can be revoked. These include, but are not limited to, the following examples:

• If the court determines that the debtor’s discharge in any filing was obtained fraudulently, for instance, if certain pertinent information is withheld regarding property ownership or possessions.
• Failure to explain any found errors in statements that are discovered during a bankruptcy audit.
• Failure to provide supporting or requested documents or requested information, especially as the result of a bankruptcy audit.

Generally, if a bankruptcy discharge is going to be revoked, it will take place during  the first year following the original discharge.

Bottom line here? If you are filing personal bankruptcy and have provided all necessary, required, and requested information and supporting documents, and have answered all questions and filled out all bankruptcy forms honestly, you should not fear having your bankruptcy discharge revoked or investigated.

Filing personal bankruptcy can be your first step in the right direction, freeing you from the burden of debt that has weighed you down. We hope this information regarding discharges when filing personal bankruptcy has been helpful to you.