Discharging Debts in Bankruptcy

One of the main benefits of filing a personal bankruptcy case is to obtain a discharge (cancellation) of your debts. Whether you file a Chapter 7 or Chapter 13, when the court enters your discharge order, you are no longer legally obligated to pay the discharged debts. As you can imagine, this dramatic relief from debt can save you from thousands of dollars in debt! As a result, bankruptcy is often described as providing you a financial “fresh start.”

When you file your bankruptcy case, you must make full and complete disclosures about your finances and assets. The court requires you to list all of your debts and all of your creditors. You must also disclose your income, expenses and other financial information. While this may seem extreme to you, it is necessary to ensure you receive a complete discharge of your debt. The list of your creditors is used by the court to notify them of your filing and discharge. This is beneficial to you because all parties who receive notice are not only prevented by the automatic stay from taking any further collection activity against you, but they are also bound by your discharge order.

Once the discharge order has been filed with the court, creditors are prohibited from taking any collection measures against you in an effort to collect the discharged debt. If a creditor does not abide by the discharge order and attempts further collection of a discharged debt, you may be able to recover damages against that creditor in court.

If you are interested in learning more about filing a Chapter 7 or Chapter 13 case, contact a knowledgeable bankruptcy lawyer at Nielsen Law Group today. You can schedule your initial consultation by calling (480) 888-7111 or submitting a web request here.