What Is A Discharge?

There are certain types of debts including credit card debt listed in your bankruptcy that may be discharged whenever you file for Chapter 7 or 13 bankruptcy.  When a debt is discharged in bankruptcy the debt is forgiven. Whenever a particular debt in discharged, you are relieved of legal responsibility for the debtor and can never be forced to pay it back.  Your creditors will be prohibited from suing you or taking legal action to enforce the debt. They are also prohibited from calling you, sending your demand letters, or harassing you in any way.

From a legal standpoint, the term "discharge in bankruptcy" refers to a permanent order issued by a federal bankruptcy judge that forbids credit card companies and other nonexempt creditors from collecting on an existing debt that were listing in your bankruptcy. The term "discharge in debt" actually refers to one or all of the debts covered by the order.

The timing of the discharge will depend on the chapter under which a debtor files.  With a Chapter 7 Bankruptcy, the court typically grants a discharge relatively fast.  Generally around 4 months after the petition is filed. Chapter 13 grants debtors a temporary reprieve from creditor harassment and may also allow them to keep their home or car. Under this chapter, you must pay back credit card debt and other nonexempt debts within a certain period of time than ranges between 3 to 5 years. After this specified time period and repayment schedule, the debt is considered discharges.

By | 2017-11-07T10:27:16+00:00 June 26th, 2012|Bankruptcy|Comments Off on What Is A Discharge?

Will Bankruptcy Hurt my Credit Score?

Usually the biggest detriment of bankruptcy is its negative impact on your credit score. However, this may not be an issue for many people because they already have bad credit or they soon will because they lack the ability to stay current on their debts. If a person has suffered, or will soon suffer from, a home foreclosure, a vehicle repossession, or extended credit card delinquencies or write-offs, a bankruptcy will probably not make his credit any worse. Additionally, having a poor credit score doesn't mean you can’t get credit. It just means that some loans will be tougher to get and you may have to pay higher interest rates on large purchases like furniture, cars and homes.

There comes a time when bankruptcy is unavoidable. You may need to file to save your home or your bills are consistently higher than your income. Whatever the reason, filing bankruptcy can be a new beginning. You credit score may be hurt for a time, but if you use that time properly, you can start on the road to a new financial future and a better credit score.

To see if filing bankruptcy is for you, call a bankruptcy attorney. Most provide an free initial consultation.

By | 2017-11-07T10:27:16+00:00 June 13th, 2012|Bankruptcy|Comments Off on Will Bankruptcy Hurt my Credit Score?