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Bankruptcy discharge, how does it work?

On Behalf of | Mar 30, 2017 | Chapter 7 Bankruptcy |

When looking for debt relief options, it’s normal to question how each option really works and how each actually helps your situation. In Wisconsin, there are many possible solutions. The best option for you will depend on your individual situation.

People often start out by talking with their friends or consulting the Internet for options. This may be a good option if you are looking for referrals for home services, but for bankruptcy it can be problematic because there are many myths and a great deal of misinformation about bankruptcy.

Bankruptcy is one of your options. Learn about the bankruptcy process, how long it takes and what is included in a bankruptcy discharge. How does discharge actually work?

What does discharge do?

If you file a Chapter 7 bankruptcy, the court will release you from your obligation to pay back many if not all of your debts.

If you file a Chapter 13 bankruptcy, the court will release you from the same obligations. The difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 13 bankruptcy involves a repayment of some of the debt over a period of three or five years. There are several reasons why people choose Chapter 13, such as repaying mortgage arrears or paying back tax obligations.

How long does the bankruptcy process take?

The first step after filing is to take a financial management course. This may be taken online. The purpose is to help you be financially successful in your post-bankruptcy life.

The next step is to attend the “meeting of creditors”, otherwise known as a 341 hearing. Despite its name, the meeting seldom includes creditors. It is usually a meeting with the bankruptcy trustee to review your bankruptcy petition. The 341 meeting is typically scheduled several weeks after you file. After that meeting, you must wait 60 days to obtain your discharge.

Once you receive your discharge, you have no further legal responsibility for making payments on the debts covered by the discharge.

Will a Chapter 7 bankruptcy clear all my debts?

It depends on the types of debt you owe. Dischargeable debts may include, but are not limited to:

· Credit card debt

· Medical debt

· Deficiency balances from foreclosed homes or repossessed cars

· Several kinds of personal loans including payday loans

Certain debts ordinarily don’t qualify for discharge. These includes child support, alimony, court ordered fines and restitutions, business taxes, any debt incurred by fraud and often student loans.

Will creditor harassment stop after I file bankruptcy?

Filing Chapter 7 or Chapter 13 bankruptcy should end creditor harassment. As soon as you file an injunction known as the automatic stay goes into effect, barring creditors from continuing to attempt to collect on your debts. If creditors continue to harass you for payment, you may file a complaint with court.

Find out which bankruptcy may be right for you.

An experienced bankruptcy attorney will answer any other questions you have about debt discharge and assist you in pursuing bankruptcy or any other debt relief options that suit your circumstances. By seeking help as soon as possible, you can take any actions necessary to get your financial situation under control and move forward.


Watch Attorney James Miller on the Morning Blend as he discusses his new book, The Secrets About Bankruptcy They Don't Want You To Know.

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