What is the bankruptcy discharge
If you plan to file for bankruptcy or have already filed then your goal is to eliminate all or most your debts. The bankruptcy discharge is the term used in bankruptcy law to describe the elimination of debts. The bankruptcy court issues an order of discharge at the end of the case to let you know that your debts have been eliminated.
In a bankruptcy, there are certain categories of debts are you’re able to eliminate (discharge), and there are certain categories of debts that you cannot eliminate.
What type of debt you can discharge in bankruptcy?
The date the bankruptcy case is filed on is very important to determine whether a debt is dischargeable. Only those debts that arose before the date the bankruptcy case was filed are dischargeable. You will be personally liable for any debts incurred after the bankruptcy case is filed.
Although not all debts are dischargeable, the majority of your debts will be discharged in a bankruptcy proceeding. As a general rule, if a debt is not listed in the bankruptcy code as a debt that cannot be discharged then it is dischargeable.
Categories of debts that are commonly dischargeable:
- Credit card debt
- Medical bills
- Collection agency accounts
- Utility bills
- Deficiencies from foreclosures
- HOA overdue fees (see this article to understand which HOA fees are dischargeable)
- Judgments for unpaid rent
- Attorney fees
- Some civil judgments
- Charge accounts
- Some auto accident claims
- Some taxes (see this article to understand which taxes could be discharged)
- Business debts
- Repossession deficiencies
- Payday loans
What type of debt you cannot discharge in bankruptcy?
There are categories of debts that you cannot have discharged in a bankruptcy proceeding. These debts are automatically deemed non-dischargeable. These debts survive the bankruptcy proceeding, and you will be personally liable for them after the bankruptcy case ends.
This is a list of debt categories that are not dischargeable:
- Certain tax debts (see this article to understand which tax debts are not dischargeable)
- Debts for money, property, or services obtained by fraud
- Debts that were not listed in the bankruptcy petition
- Domestic support and child support debts
- Debts arising out of willful or malicious injury by the debtor to another entity or to the property of another entity
- Debt that derives from a fine, or penalty owed to a governmental unit
- Debt that arose from the death or personal injury caused by the Debtor’s operation of a motor vehicle, if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.
- Student loans (very high standard to discharge)
- Certain HOA fees (see this article for more detail)
Click here for a complete list of debts you cannot discharge in a bankruptcy.
When does the bankruptcy discharge take place?
Once the §§341 meeting of creditors takes place and no issues arise, then the court will issue an order of bankruptcy discharge 2 -3 months after the meeting. You will receive this order of bankruptcy discharge by mail from the bankruptcy court. You should also receive notice of your discharge from your bankruptcy attorney. In addition, if you would like to follow your case you should create an account with the electronic filing system, PACER, and will be able to see if the court has issued the bankruptcy discharge order.
What happens after the bankruptcy discharge?
A few months after you receive the bankruptcy discharge you should order your credit report to make sure that the dischargeable debts listed in your bankruptcy are listed correctly. The creditors that were contacting you before the bankruptcy case cannot start to contact you again. If any creditor whose debt was included in the discharge contacts you then that creditor is violating the bankruptcy discharge order. If this occurs contact your bankruptcy lawyer.
Speak to an experienced Washington D.C. Bankruptcy attorney before filing for bankruptcy. A bankruptcy attorney will advice you if bankruptcy is a good option for you depending on your individual circumstances. A Maryland bankruptcy attorney will explain to you which type of debts you’re able to eliminate in a bankruptcy proceeding.
A Washington D.C. bankruptcy attorney could give you advice on the effect that filing for bankruptcy will have on the HOA fees you owe. Ready learn more about the bankruptcy process? Call 202-445-4775 or contact us for a consultation.