Filing for bankruptcy can feel overwhelming, but understanding the discharge process can help clear up some of the confusion. The bankruptcy discharge eliminates your eligible debts, giving you a fresh financial start. It’s important to know how the process works, if you are considering filing for bankruptcy.
How does bankruptcy discharge work?
The discharge process begins when you file for bankruptcy, whether it’s Chapter 7 or Chapter 13. In Chapter 7, a trustee sells nonexempt assets and uses the proceeds to pay your creditors. If you qualify, most of your unsecured debts (like credit card bills) will disappear. Chapter 13 differs because it involves a repayment plan. At the end of the plan, any remaining qualifying debt will be discharged.
After you complete all necessary steps in your bankruptcy case, including attending a creditors’ meeting and finishing required financial education courses, the court will issue a discharge order. This order means you are no longer legally obligated to pay most of your debts.
What debts can the court discharge?
Not all debts qualify for discharge. Common debts that disappear include unsecured debts, like credit cards, medical bills, and personal loans. However, some debts, like child support, alimony, certain tax debts, and student loans, generally don’t discharge.
The discharge order also removes personal liability for any debts included in the bankruptcy case. This can provide much-needed relief if you’re struggling to make ends meet.
How long does the discharge process take?
The length of time to get a discharge depends on the type of bankruptcy you filed. In Chapter 7, it can take as little as 3-6 months, while Chapter 13 cases may last 3-5 years, depending on your repayment plan. Once you complete the process, you’ll receive a discharge order, and most of your debts will disappear.
The bankruptcy discharge process can bring peace of mind by eliminating many of your debts and giving you a clean financial slate. Knowing which debts can and can’t be discharged will help set realistic expectations for what you’ll be able to erase from your financial history.
