If you begin evaluating Chapter 7 bankruptcy, you will quickly discover that the main reason people prefer this branch is for the benefit of receiving a discharge of debts. A discharge offers freedom from debts, and it is important to understand how this works in a Chapter 7 case before you rush into filing for bankruptcy. To understand how this works, here are three facts about Chapter 7 discharges for you to know before you file.
A discharge forgives the debt
The term "discharge" is another word for debt forgiveness. When the court says that you will receive a discharge from your debts, the court is saying that they are wiping out these debts completely. If you owe $10,000 and the court discharges it, you will owe nothing. The forgiveness of debt is the one key benefit offered through Chapter 7 bankruptcy cases, and this is the way it offers so much relief from debt for people who owe a lot of money for credit cards and other types of qualifying debts.
You can only receive a discharge for qualifying debts included on your paperwork
When it comes to the debts that the court discharges, it is important to know that the court will only offer a discharge for qualifying debts. For a debt to qualify, the debt must be an unsecured debt and must meet other conditions. Credit card debts almost always qualify unless there was some type of fraud involved with the use of the credit cards. Medical bills generally qualify, too, and there are other types of debt that qualify.
You should also understand that for the court to discharge a debt, you must list it on the documents you complete for your bankruptcy case. If you fail to list a debt, even if it would qualify, you will not receive a discharge for it. After the case ends, you would still owe this debt, so it is important to list every debt you owe.
You should ensure that your credit report accurately shows the discharges
After your case is complete, you should check your credit report to make sure that all discharges are showing up on it. If they are not, you should dispute the items that are wrong to make sure they reflect the discharge from your bankruptcy case.
A bankruptcy lawyer can review all your debts and financial information and can determine how filing for Chapter 7 would affect you. If you would like to find this out, make an appointment with a consumer bankruptcy lawyer today.
