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Does the Chapter 7 discharge clear me from my debts?

Texans whose debts have reached the point where they decide to file for Chapter 7 bankruptcy often have a hard time believing that their debts can be made to go away through simply filing for bankruptcy and following through with the process. Those who are asking if the Chapter 7 discharge really clears their debts should know how the discharge process works and what debts are dischargeable. Individual debtors who have a successful Chapter 7 bankruptcy will be freed from liability for most debts. Subsequently, creditors can no longer act to collect on the debt.

While there are exceptions, statistically and except for cases that are converted to a different type of bankruptcy that is more suitable to their situation, more than 99 percent of Chapter 7 cases result in the discharge. A party has the right to file a complaint to discharge the motion, but if that does not happen, the discharge will come within 60 to 90 days after the first meeting of creditors.

If the debtor is found to have committed perjury, did not keep adequate records, did not explain why assets were lost, did not follow the orders of the court, transferred or concealed property, or did not take the necessary financial management courses before and after the filing, then the discharge might not be approved. The creditors cannot pursue legal action once the debts have been discharged. However, if there are taxes owed, alimony and child support, or student loans, then these cannot be discharged via Chapter 7.

People who try to understand the bankruptcy code and move forward with the process without having legal help are bound to either misunderstand it or allow fear to prevent them from pursuing it. A legal professional who is experienced in Chapter 7 can make certain that all the details are handled and any sticking points are addressed for a successful discharge.

Source: uscourts.gov, "Chapter 7 Bankruptcy Basics -- The Chapter 7 Discharge," accessed on June 6, 2017

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