Many people are in great need of a relief from their debts and want to find a way to get a fresh start from their finances. Many of these people usually consider bankruptcy as a last resort, perhaps thinking of it as a curse or a heavy burden.
It is important to realize however that bankruptcy does not need to always be this way. It is there to help people who have become tangled in debt, and there are many benefits that can help a person or business to get relief from their debt.
What is a bankruptcy debt discharge?
A debt discharge is what happens when a debtor that has filed for bankruptcy is able to release liability for some of their debts. In other words, although the debts are unpaid, the debtor has no legal obligation to repay them.
When does a debt discharge happen in a bankruptcy?
When a debt discharge happens depends on the bankruptcy Chapter. In Chapter 13, an assessment of your income will be made, and from there it will be determined how much of your debt you can realistically pay off. The rest are likely to be discharged after the repayment period.
How do I know if I am eligible for a debt discharge?
If you are eligible to apply for Chapter 13 bankruptcy and earn a regular income, you are likely eligible for certain discharges. Some types of debts, such as fines, most student loans or missed child custody payments are non-dischargeable.
If you are considering Chapter 13 bankruptcy, it is important to understand all aspects of it so you are well equipped to know how it will affect your life.
Source: FindLaw, "The Debt Discharge in Bankruptcy FAQ," accessed Feb. 09, 2018