Bankruptcy Discharge: What does it really mean?

The primary goal of filing a personal bankruptcy is to eliminate debt or obtain a “discharge of debt.” A discharge order cancels your liability to repay the debt. As a result, many people save thousands of dollars by filing a Chapter 7 or Chapter 13 case, which is often referred to as obtaining a fresh financial start.

When you file bankruptcy, you are required to disclose ALL of your debts, assets, expenditures, income and other financial information. You must file a complete list of your creditors (anyone you owe money to) which is called the “creditor matrix.” The court uses your creditor matrix to mail notice of your filing to all of your creditors. This benefits you because all of the creditors who receive notice of your filing will be bound by your discharge order.

At the conclusion of a successful bankruptcy case, you will receive your discharge order. Once you obtain your discharge, creditors are prohibited from taking any collection activity against you regarding the discharged debt. This means you will no longer receive harassing telephone calls, demanding letters, or have collection lawsuits filed against you for discharged debts. If a creditor ignores the discharge order and take action to collect a discharged debt, you may be able to recover a monetary judgment or sanctions against that creditor.

Contact Faro & Crowder, PA to discuss your individual circumstances with an experienced personal bankruptcy attorney. If you have questions regarding filing a Chapter 7 or Chapter 13 case, contact us for a free consultation.

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