What Is a Bankruptcy Discharge and Why Does It Matter?

by | Aug 17, 2015 | Bankruptcy Law

People can find themselves facing financial problems that seem to be insurmountable. When no amount of budgeting or help from a financial counsellor will make things easier to manage, the only thing to do is talk with an attorney about filing for bankruptcy. For those who wonder how the process works, it pays to ask the question of what is a bankruptcy discharge and listen closely to the response.

Understanding the Concept
So, what is a bankruptcy discharge and how will it affect the client? A discharge is simply an order from the bankruptcy judge that declares the debtor is no longer responsible for a debt and is under no obligation to repay the balance to the creditor. This typically occurs after the judge has gone over the particulars of the petition and the debtor has met with all requirements of the court. Should the judge determine that the debtor is in full compliance with current laws related to bankruptcy, it is possible to receive this type of relief.

Keep in mind that depending on the type of personal bankruptcy protection the debtor is seeking, the court may order certain assets to be sold and the funds distributed to partially settle outstanding debts. Those assets are typically things that the court believes the debtor does not need in order to maintain a reasonable standard of living. For example, the court is not likely to declare the vehicle used to get to and from work should be sold. If the debtor does happen to own a second vehicle that is not used regularly, it could be considered eligible for sale.

What Happens Next?
Once the bankruptcy discharge has occurred, the debtor no longer has to worry about collection attempts, or about any property or other assets being seized. Instead of sleepless nights worrying about money, the debtor is now free to begin making plans for the future. In the best-case scenario, that will mean putting all the information learned in the court-ordered financial management classes to good use. The debtor will commit to making sure income exceeds expenditures, and there is money set aside in savings to provide some measure of financial security.

For those who are considering the possibility of bankruptcy, visit Stlbankruptcyfirm.com and arrange to speak with an attorney. Doing so may be the most practical way to get a fresh start and move forward without constant worries about finances.

Tweet us on Twitter!

Recent Posts



Related Posts