What Is a Bankruptcy Discharge?
The goal of any bankruptcy is the discharge of legal obligations associated with consumer debts, such as loans or credit card bills. An approved bankruptcy is known as a discharge, whether the debtor files for Chapter 7 forgiveness or a Chapter 13 restructuring and debt repayment plan. Bankruptcy provides an opportunity for cash-strapped debtors to start over without the burden of most debts.
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Time Frame
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It takes up to eight months for debts to be legally discharged through Chapter 7 bankruptcy, and two to five years to complete a Chapter 13 repayment plan and receive a formal debt discharge.
How it Works
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A bankruptcy discharge permanently bars creditors from contacting or suing a debtor, seizing property, or otherwise trying to collect a debt.
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Exceptions
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Certain debts cannot be discharged through bankruptcy. These include most government-issued student loans, taxes less than three years old, child support and alimony, and court fines.
Lawsuits
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Almost all lawsuits can be discharged through bankruptcy, except for those which result from drunk driving .
Cost
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As of 2009, receiving a bankruptcy discharge, costs $274 for Chapter 13 restructuring cases, and $299 for Chapter 7 debt forgiveness.
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