The primary purpose of bankruptcy court is to discharge certain debts to give a debtor a fresh start. A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. Discharge prohibits the creditors from taking any form of collection action against debtors on discharged debts. The bankruptcy discharge varies depending on the chapter of bankruptcy a debtor files. Unless there is lawsuit involving objections to the discharge, the debtor will usually automatically receive a discharge.
In chapter 7 cases, a discharge is not an absolute right of the debtor. An objection to the debtor’s discharge may be filed by a creditor, by the trustee in the case. Creditors receive a notice shortly after the case is filed with the deadline for objecting to the discharge. To object to the debtor’s discharge, a creditor must start a lawsuit called an adversary proceeding before the deadline set out in the notice. In a chapter 7 bankruptcy, the court usually grants the discharge without any delay on expiration of the time fixed for filing a complaint objecting to the discharge or the application for dismissal of the case. Bankruptcy court issues a discharge order 60 days following the first date set for the creditors meeting or nearly four months after the date the debtor files the petition with the bankruptcy court.
On an average, in 99 out of 100 chapter 7 bankruptcy cases, the court may deny the debtor a discharge if the debtor failed to obey orders of the bankruptcy court. Debtor’s failure to produce correct financials or failure to explain satisfactorily any loss of assets or actions like transferring, hiding, or destroying property of the estate may lead to denial of discharge.
The debtor gets a discharge for most debts in a chapter 7 bankruptcy case. But all the debts are not discharged under chapter 7 bankruptcy case. Debts for alimony and child support, certain types of tax claims, loans assured by a governmental unit, debts for fines and penalties and debts due to improper behavior of the debtor are not discharged.
The trustee or the creditors may request to revoke the debtor’s discharge in a chapter 7 case alleging the fraudulent behavior of the debtor. The court may revoke a chapter 7 discharge if the debtor fraudulently obtained the discharge.
Related Articles of Interest :
-
Chapter 7 Law
10 August 2010 8:30 PM |
No Comments
Chapter 7 bankruptcy aims at giving a fresh start to a person who is too heavily burdened with debt to discharge it in a normal manner. Since chapter 7 completely wipes out his debts, it is also known as a ‘liquidation bankruptcy’ as opposed to...
-
Chapter 7
10 August 2010 8:30 PM |
No Comments
The chapter 7 law of bankruptcy aims at giving a fresh start to a person who is too heavily burdened with debt to discharge it in a normal manner. Since chapter 7 completely wipes out his debts, it is also known as a ‘liquidation bankruptcy’,...
-
Chapter 7 Bankruptcy Laws
10 August 2010 8:30 PM |
No Comments
Chapter 7 is one of the bankruptcy laws that can be used to file a petition if the borrower has an excessive amount of debt and has no way to repay it. The law is for individuals wishing to file for bankruptcy. This law allows...
-
A Guide To Chapter 7 Bankruptcy
10 August 2010 8:30 PM |
No Comments
Bankruptcy is a legally declared inability of individuals or businesses to discharge their debts. A declared state of bankruptcy can be requested not only by creditors in an effort to get what they are owed but also by the insolvent individual or organization. If it...
-
Chapter 13 Bankruptcy
10 August 2010 8:30 PM |
No Comments
Chapter 13 of the United States Bankruptcy court provides relief to debtors who want to discharge their debts but are unable to do so because of financial constraints. The reasons may vary: unemployment, marital problems, medical expenses, or extended credit limit. If you find yourself...
-
Chapter 7 Bankruptcy Qualification
10 August 2010 8:30 PM |
No Comments
Filing for bankruptcy has become the only relief for thousands of people who are experiencing massive debts. According to section 11, an individual, a partnership or a corporation or other business entities can qualify for relief under chapter 7 of the Bankruptcy Code. On October...
-
Chapter 7 Bankruptcy Law
10 August 2010 8:30 PM |
No Comments
Under the grant of authority given by Article I, Section 8, of the United States Constitution, Congress enacted the “Bankruptcy Code” in 1978, which is codified as title 11 of the United States Code. From October 17, 2005, the courts must charge a $220 case...
-
Chapter 13 Law
10 August 2010 8:30 PM |
No Comments
Chapter 13 bankruptcy law contains procedures to discharge the debts of individuals or couples who have a regular source of income and are sincere in their intention to pay off their financial liabilities. The law places limits on secured and unsecured debts, which are approximately...
-
Chapter 13 Bankruptcy Laws
10 August 2010 8:30 PM |
No Comments
Chapter 13 is a bankruptcy law under which a petition can be filed by an individual or company. Chapter 13 dictates that the debtors repay the debt amount from their monthly earnings in installments. The court decides the time within which the decided amount has...
-
Chapter 7 Bankruptcy
10 August 2010 8:30 PM |
No Comments
Chapter 7 bankruptcy, also called straight bankruptcy, helps debtors to liquidate some of their debts, mostly unsecured, and enables them to make a fresh start in life without being incessantly harassed by the creditors’ calls for refunds. Cases filed under chapter 7 are usually decided...