Mounting debt can put a strain on your finances. Many consumers are so far in debt that they cannot see a way out. Bankruptcy provides a viable solution to help consumers get back on solid financial ground.
The culmination of a bankruptcy case is the discharge. It's important that you understand your discharge so that you are aware of the benefits and limitations your bankruptcy has to offer.
What is Discharge?
A discharge is essentially a court order that relieves you of any legal responsibility to pay back debts listed in your bankruptcy filing. It's important that you carefully compile a list of all your creditors before you file for bankruptcy.
Once you have received a discharge from the judge in your case, you cannot go back and add creditors to your bankruptcy. A complete discharge is only possible when you take the time to list out each and every debt you owe from the beginning of your bankruptcy case.
Are all Debts Discharged?
Even though a bankruptcy discharge is a legal and binding order, not all of your debts will be included in the discharge paperwork. The government prohibits certain types of debts from being included in a bankruptcy.
You will not be able to escape your legal obligation to repay child support, income tax debt, and student loan debt. These accounts will remain your legal responsibility, so be sure that you understand your financial obligations once a discharge has been issued.
Should Creditors be Notified of a Discharge?
Any creditors that you have listed in your bankruptcy paperwork will be provided with a copy of your discharge order. This lets the creditors know that the debt has been eliminated so that they can cease collection efforts against you.
Even though the creditors will receive their own copy of the discharge order, you should always keep your own copy close by. You may find that you need to send a copy of the order personally as verification if a creditor continues to seek payment for a debt that was discharged in your bankruptcy.
A bankruptcy discharge can provide you with the financial freedom you need to establish positive spending and saving habits in the future. Work closely with your attorney to ensure that you understand which debts your discharge includes. Bankruptcy attorney services can help you ensure that your discharge is prepared correctly to avoid potential problems with creditors in the future.